California to Tax Sales of Medi-Cal

Jul 2, 2013 | Gail Cole

California imposes temporary tax on sales of Medi-Cal managed care plans.

Update, 8.20.13: The California State Board of Equalization has released a special notice explaining the new Medi-Cal sales tax.

California now imposes a tax of 3.9375% on sales of Medi-Cal managed care plans, thanks to the approval of Senate Bill 78 by Governor Jerry Brown (D) on June 27. The Medi-Cal program provides health care services to qualified, low-income individuals.

Under the bill, sales tax will be imposed "on sellers of Medi-Cal managed care plans for the privilege of selling Medi-Cal health care services at retail …." The tax is to be temporary, imposed "on July 1, 2013, and before July 1, 2016, except if specified contingencies occur as provided, and only if and to the extent that federal financial participation is available and necessary federal approvals have been obtained…." (Emphasis mine).

Local taxation of Medi-Cal health services is not allowed.

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photo credit: 401(K) 2013 via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.

Avalara Author

Gail Cole

Avalara Author Gail Cole

Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.