State governments can impose a sales tax on a variety of goods and services. Understanding whether your state assesses this type of tax on massage therapy services is important because, if it does, it is your responsibility to collect the tax from your clients, then pay it to your state as required.
While it is always recommended that you check with your accountant or tax advisor to verify the requirements in your state, here are the states that appear to impose a sales tax on massage therapy services.
Is Massage Therapy a Taxable Service in Your State?
- Connecticut – Massage parlors are subject to the Connecticut state sales tax, but services provided by licensed massage therapists are not. (1)
- Hawaii – Technically, Hawaii does not have a sales tax. That said, it does have a General Excise Tax (GET) which is assessed on almost all business activities. Unlike with sales tax, businesses are not required to pass the GET on to customers, but many do. (2)
- Iowa – Massage services are only subject to Iowa’s state sales/use tax if they are provided by an unlicensed massage therapist. (3)
- Kentucky – Effective January 1, 2023, massage therapy services that are not deemed medically necessary are subject to the state’s sales tax. (4) Unfortunately, this bill does not clarify the difference between services that are and are not medically necessary.
- Minnesota – Massages are taxable in Minnesota except when requested by a licensed healthcare provider or facility via a written referral. (5) Facilities that can make referrals include hospitals, medical clinics, and chiropractor offices. The written referral must indicate that massage services are for the ongoing treatment of an injury, illness, or disease to be exempt from the sales tax, and massage therapists must keep a copy of all referrals. It should be noted that even if massage services are exempt from the state’s sales tax, they are still subject to the MinnesotaCare Tax. (6)
- New Jersey – Massages rendered in New Jersey are subject to the state’s sales tax except when ordered by a doctor’s prescription (with distinct language as to what qualifies as a prescription) and performed by a doctor, physical therapist, registered nurse, dentist, podiatrist, chiropractor, or certified midwife. (7) If ordered by an allowable healthcare provider, the referral must be in writing and include the patient’s name, the referring provider’s name and signature, the purpose of the referral, and the health conditions to be addressed.
- New Mexico – Although New Mexico does not have a sales tax, it does have a gross receipts tax that is imposed on most businesses in this state. (8)
- New York – “Typical massage services” are only subject to sales tax in this state if they are provided within New York City. (9) If provided outside of the city, they are exempt from state and local sales tax. If you sell products such as massage oils and herbal wraps, those are taxable throughout the state.
- Ohio – All massage therapy services are subject to Ohio’s state sales tax except when ordered by a licensed physician or chiropractor. (10) In cases of the latter, the state suggests that you “retain sufficient information in your records to verify the exempt sales.”
- South Dakota – Most service providers in South Dakota are subject to the state’s sales tax. While there are some exemptions, massage therapy is not one of them. (11)
- Texas – Massage services provided by massage parlors, Turkish baths, and escort services are taxable under Texas law, but not services provided by licensed massage therapists. (12)
Keep in mind that laws change all the time. So, while this data may be current as of the date researched, this does not guarantee that the information still applies one day, one week, or one year down the road. That’s why it is so important to talk with your accountant or tax advisor regularly, enabling you to stay updated on the most recent sales tax regulations in your state.
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