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Thomas M. and Martha L. Parrell



Taxpayers were assessed gross receipts tax based upon compensation Mrs. Parrel received from performing services as a registered nurse and reported on a Federal Schedule C.  Taxpayers argued that the compensation was received as an employee of a home health care agency which was exempt as employee compensation pursuant to section 7-9-17. Mrs. Parrell worked for two home health care agencies at the same time. In both jobs she dispensed medication to patients. The first agency treated her as an employee. The second company, Educare, hired her as an independent contractor and she understood that at the time she accepted the position. It was Mrs. Parrell’s compensation from Educare that was at issue in the protest.  Educare provided her with all necessary medical supplied and equipment and a desk in their offices. Mrs. Parrell provided her own uniform and vehicle and was not reimbursed for mileage. Educare paid her by the patient visit and by the hour for her office time and time on call.  Mrs. Parrell worked out her schedule of patient visits with the other nurse who performed those same duties and informed Educare of her schedule. Although it was a relatively close question, Mrs. Parrell’s knowledge that she was being hired as a contract nurse at the time she accepted the position with Educare as well as the fact that she received some tax benefits from reporting her compensation as self-employment income for federal tax purposes were persuasive in concluding that Mrs. Parrell was not an employee of Educare and was thus not entitled to the exemption found at Section 7-9-17.  Protest denied.