Dear Gary,

As president of the Washington State Dental Laboratory Association, I would like to clarify our position on one issue that was discussed on Friday, October 3rd at our meeting in Spokane. As you know, the subject of dental models or molds and the proper procedure for labs to account for sales or use tax on them has been poorly understood on both sides. We are very pleased that you are willing to consider what is customary to our members.

A primary purpose of the WSDLA board is to speak on behalf of our industry, and on this issue we are in agreement on several points. Dental laboratories are obligated to pay sales tax on all materials that do not become part of a prosthetic device. This includes plaster or gypsum products used to fabricate dental models (molds). If any of these products are purchased out of state and no sales tax was paid, then we owe the State use tax on them paid monthly or quarterly.

What is not customary is to account for the labor or time spent creating models (molds). The process of pouring models is not time consuming and often many are done at once. The dental laboratory business is very labor intensive and we have many fees that are primarily labor, however, models are not usually billed as a separate item because the labor involved in making them is incidental.

Included with this letter are a few fee schedules that demonstrate typical laboratory pricing. Two are full service labs and one is primarily crown and bridge. The list from Laboratory 1 contains no reference to models. The only time this company would charge for a model is if “pour and return” were all the doctor required. In that case there is a fee to cover the cost of pick-up and delivery. Laboratory 2 also does not mention models or molds. Laboratory 3 is one of the oldest and largest labs in the State. They do have two model related fees. One is for duplicate models, which requires a completely different set of materials to create. It is also my personal experience that they don’t usually charge for them anyway. The other fee, “model work” would be for time spent correcting problems with models provided by the clinic, not something that would appear on many invoices.

We, as an association, affirm that the primary value of dental models or molds is in the materials that they are made from. The time it takes to create them is comparable to the time it takes to print an invoice, to disinfect impressions or appliances, or to package the finished case in a box. It would be an amount of time that would be difficult to calculate. Collecting a broader array of fee schedules would bear out our position, although it would be unethical for us as a trade association to collect such information.

Thank you again for allowing us to be part of this discussion. Any response or feedback from the Department of Revenue that gives us direction would be greatly appreciated. We look forward to working with you in the future.

Sincerely,

Gary Questad CDT, President