Section R. 205.87 - HospitalsRule 37.
(1) Sales, not for resale, of tangible personal property to hospitals not operated for profit, are not taxable. A "hospital," for the purpose of this rule, means only a separately organized institution or establishment, the primary purpose of which is to provide medical, obstetrical, psychiatric, or surgical attention and nursing to persons requiring the same. The sales tax exemption for sales to a hospital which is not operated for profit does not apply to an institution, establishment, or organization that is not a hospital as defined above, notwithstanding the fact that it may not be operated for profit. "Not operated for profit" means that the income or benefit from the operation of the hospital does not inure, in whole or in part, to individuals or private shareholders, directly or indirectly, and that the activities of the entity or agency are carried on exclusively for the benefit of the public at large, and are not limited to the advantage, interests, and benefits of its members or a restricted group.(2) If an exemption is claimed, then, at the time of transfer of the tangible personal property, the seller shall retain, as part of the seller's records, an executed exemption certificate which reads as follows:CERTIFICATE TO BE EXECUTED WHEN TAX EXEMPT SALE IS MADE TO AN EXEMPT INSTITUTION OR AGENCY
The undersigned hereby certifies that the item or items being purchased are to be used or consumed in connection with the operation of the exempt institution or agency named in the space provided below and that the consideration for the purchase moves from the funds of the designed institution or agency. In the event this claim is disallowed, the transferee promises to reimburse the seller for the amount of tax involved.
Date __________________
_________________________________________________
Name of exempt institution or agency
_________________________________________________
Signature and title of person making certification
(3) A hospital claiming an exemption shall prove by its articles of association and bylaws that it is not directly or indirectly operated for profit, and that its income and assets may not inure, in whole or in part, directly or indirectly, to the benefit of any individuals, members, or private shareholders whatsoever. A copy of the articles of association and bylaws shall be submitted to the revenue division of the department of treasury for determination as to whether the hospital is entitled to the exemption.(4) Sales by hospitals which are taxable retail sales include, but are not limited to, the following:(a) Meals sold to visitors and employees.(b) Nonprescription drugs, nonprescription medicines, and supplies sold to patients, doctors, employees, and the general public for consumption off the premises.(c) Sales of cosmetics, souvenirs, and other similar merchandise.(5) Sales by hospitals which are not taxable retail sales include, but are not limited to, the following:(a) Drugs, medicines, insulin, and meals furnished patients and consumed on the premises.(b) Charges for oxygen, blood plasma, and blood administered to patients.(c) Dressings and bandages applied in the hospital.(d) Charges for X-ray radiation treatments, braces, splints, cases, therapeutic diets, and intravenous solutions furnished patients.(e) Charges for anesthesia supplies and laboratory tests.(f) Sales of eyeglasses prescribed or dispensed to correct a person's vision by an ophthalmologist, optometrist, or optician, and repair and replacement parts for such eyeglasses. (See R 205.104.)(6) Hospitals making sales at retail shall be licensed and shall pay the sales tax, where applicable, whether organized for profit or not.Mich. Admin. Code R. 205.87