Most medical practices in Pennsylvania are aware that Pennsylvania imposes a sales and use tax on various items and services purchased by medical practices. However, physicians are not always clear on exactly the items and services to which the tax applies. For example, the tax applies to secretarial/administrative services purchased from a third party vendor. This includes transcription services. If your vendor is not charging a sales tax or you are not reporting a use tax in connection with your outside transcription services, you may have an issue. The Pennsylvania Medical Society has published a helpful guide entitled How to Comply with State Sales and Use Taxes. If you’re not sure whether or how Pennsylvania’s sales and use tax applies, I recommend that you give your accountant or attorney a call since the Pennsylvania Department of Treasury is currently conducting sales and use tax audits of physician practices.