Income received from the following activities performed by a podiatric physician is subject to the service and other activities B&O tax classification:
- Examinations and diagnostic services associated with routine foot care.
- Cutting or removal of corns and calluses.
- Nail trimming, cutting or clipping of nails.
- Treatment of chronic foot conditions.
- Surgical operations.
A podiatric physician may deduct certain items from taxable income. The following items are allowable deductions:
Amounts previously reported and determined to be uncollectible. These amounts must also be written off for IRS purposes. The bad debt credit or deduction is limited to the original retail seller. See Bad Debt Tax Credit. WAC 458-20-196, Special Notice – Bad Debt Deduction – Limited.
Cash and Trade Discounts
Discounts allowed for payments in cash or trade. The amount of the discount may be deducted from the gross proceeds of sales if such amount was previously reported. Discounts are typically used as incentives for early payment. See WAC 458-20-108.
Interstate and Foreign Sales
Goods sold and delivered to customers outside of Washington or transportation of persons or goods across state or international boundaries. Documentation is necessary. Podiatric physicians must physically render the medical service outside state boundaries. See WAC 458-20-193; 458-20-193C; 458-20-194.
Advancements and Reimbursements
Amounts received as advancement or reimbursement when the customer or client alone is liable to pay for the procurement of goods and services. The taxpayer making the payment cannot have primary or secondary liability, other than as agent, to pay for the goods and services. See WAC 458-20-111.
Returns and Allowances
Amount of the sales price on which sales tax has been returned or credited to the purchaser. See WAC 458-20-108.
Example: The correct way to calculate a refund and report it on your excise tax return is outlined in the example below.
Calculating the Refund – Retail Sales
- You sold a pair of podiatric sneakers for $85 dollars and collected $7.65 in sales tax (9% rate).
- The amount refunded to the customer is $85 (selling price) + $7.65 (sales tax collected) = $92.65.
Reporting the Refund – Retail Sales
- On the Deduction Detail pages, under the Retail Sales Tax section, report a deduction of $85 on the Returns & Allowances line.
- On the Retailing line of the B&O tax classification, report an $85 deduction in column 2..
- On the Retail Sales line, report an $85 deduction in column 2..
- Remember to deduct $85 from the taxable amount reported for the location code of the original sale.
Most allowable deductions are listed on the Deduction Detail sheet. Using the Other deduction line requires appropriate documentation or explanation. Please refer to statute or call your local Revenue office to ensure the deduction is valid. Invalid deductions will be disallowed.
A “resale” deduction is not valid under retail sales tax. Report amounts sold for resale under the wholesaling classification of the B&O tax. Also, there are no deductions for labor, materials, or any other costs of doing business.