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Not-for-profit hospitals and nursing homes that qualify as exclusively charitable institutions are not subject to sales tax when selling food or medicine to their patients. Hospital dining facilities that are not open to the general public are also exempt.
However, a hospital or hospital auxiliary incurs a sales tax liability when selling products such as candy, chewing gum, tobacco products, and razor blades, since these items are not necessary for basic hospital service and place the hospital in competition with community businesses.