Taxes on Medical Services and Products: FSA Eligibility
What are taxes on medical services and products?
Taxes that are spent on purchasing medical services and products are eligible for reimbursement with a consumer-directed healthcare account. County, state and federal taxes may all be counted for this purpose.
Taxes are often higher on luxury items and vices. Luxury items may include fashion items, cosmetics, vehicles, and rare minerals. Vices include cigarettes, sugary drinks and food, alcohol, etc. Taxes on these items may grow to a larger sum than the original market price for the item, especially when an item's taxes are diverted to public-health spending or public good programming to mitigate the effects of public consumption of that item without actually banning it. The most common example of this dynamic is cigarettes.
Taxes paid when purchasing medical services and products are rare, but if they are part of the expense, then the tax costs are reimbursable.