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GREENSBORO - Those free medicine samples you sometimes get at the doctor's office are officially, well, free.

As in no cost to the patient, and now no tax cost to the doctor.

Today, Gov. Mike Easley signed a property tax bill passed by the General Assembly last week that includes an amendment exempting free prescription drug samples.

"It's one small paragraph in a much, much bigger bill," said Wilma C. Bailess, executive director of the Greater Greensboro Society of Medicine. "But it means a lot to doctors in Guilford County and their patients."

Without the law, doctors could have been charged property taxes on the free pharmaceuticals dispensed to their patients.

In June, the Guilford County Tax Department billed Greensboro-based Eagle Physicians and Associates for unpaid taxes after an audit revealed the group's doctors didn't list free drug samples on their tax returns from 2003 to 2007.

Francis Kinlaw, Guilford County's tax director, said his department was simply following state law.

A directive issued May 26, 2006, by the N.C. Department of Revenue said because the medicines are not for sale, they are not considered inventory - which is tax-exempt.

Instead, the drugs are considered office supplies, which makes them personal property of the medical office and subject to taxation.

"We never opposed the concept (of tax-free drug samples) in our tax department," Kinlaw said. "But we just wanted to be certain we complied with the state Department of Revenue's directive and state law. I think there's a lot of momentum for this (new bill) to become law. We will certainly do whatever state law says."

Eagle, which operates 13 practices in Guilford County and employs 64 doctors, disputed paying the back taxes.

"We've had just slews of calls, as you can imagine," Bailess said. "The passing of this Senate bill - it's very positive for the patients and very positive for the medical practices of Guilford County. ... We're very pleased."

Fran Sembert, Eagle's director of managed care, said many patients rely on the free drugs.

"Uninsured and underinsured, we have untold numbers of people whose lives could depend on free samples," Sembert said. "This is the right thing to do."

Even though the amendment is now law, it's unclear whether Eagle's doctors will have to pay back taxes. The bill was written to be effective for taxable years on or after July 1, 2008.

"It is my hope that because the amendment was actually more of a clarification, and especially since it was spoken about as a clarification on the floors of the House and Senate, that Eagle should not have to pay that tax because it was never the intent," Bailess said. "This is something that will be discussed at length by the state Department of Revenue."

Sembert said the bill's passage and the governor's signature proved Eagle's point.

"It's vindication for us," she said, "and going forward, it could mean no one else will have to deal with this."

Contact Jeff Mills at 373-7024 or jeff.mills@news-record.com