Can Municipalities Collect Sales Tax on Medical Records Bought for Litigation Purposes

Tough economic times leave businesses and government entities looking to maximize revenue in creative ways not before imagined. At least in Denver, the answer is no In Treece, Alfrey, Musat & Bosworth, PC v. Department of Finance, City and County of Denver (No. 10CA0026, November 23, 2011), the Colorado Court of Appeals decided that a law firm that obtains medical records during the course of litigation does not have to pay sales tax under the Denver Municipal Code. Law firms often obtain medical records during litigation and such medical records belong to the law firm, the client, or the insurance company involved. Typically, hospitals and other healthcare providers are not in the business of “selling” medical records and do not charge sales tax on providing photocopies of such. You may find the court’s decision at http://www.cobar.org/opinions/opinion.cfm?opinionid=8295&courtid=1.