Ohio ~ Sales and Use Tax: Medical Transcription Services Were Taxable

CCH Tax Day Report

Medical transcription services purchased by a medical practice were subject to Ohio use tax because they did not meet the statutory definition of “personal or professional service.” Though it is possible to establish a medical transcription service as a professional service if the transcriptionist provides services pursuant to the skills obtained in an approved certificate program, the record did not show that the transcriptionists hired by the taxpayer held certificates from an approved college program. Furthermore, the transcription services were not a personal service, as the true object of the transaction was the production of a written transcript and the transcriptionists did not apply cognitive skills or analytical thought to interpret or adjust the data. Instead, the transcription services were found to be automatic data processing, as the transcriptionist took information from notes, tapes, medical reports and other sources and used a computer to place them into another medium.

Dayton Physicians LLC v. Testa, Court of Appeals of Ohio, Second District, No. 26881, August 12, 2016, ¶404-524

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