Claim adjustment reason code
Denial code CO-235 meaning
CARC 235, usually seen as CO-235: This adjustment is for sales tax.
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- Reason code
- CARC 235
- Short name
- Sales tax
- Plain meaning
- This adjustment is for sales tax.
- Group codes
- CO-235: Contractual obligation. The provider absorbs the amount under its contract or the payer's rules. Do not bill the patient for it. PR-235: Patient responsibility. The patient, or a secondary payer, may owe the amount.
Plain-English summary written by Rivvi. X12 owns the CARC list and its exact wording, which is not reproduced here. Read it on the X12 CARC list (list dated November 1, 2025, checked October 23, 2026). This page does not decide how a claim is paid.
Common causes
- Sales tax was billed or applied.
What to check before resubmitting
- Check state tax rules for the item.
Related pages
Questions
What does denial code CO-235 mean?
This adjustment is for sales tax. This is Rivvi's plain-English summary of CARC 235. X12's exact wording is on x12.org.
How do I fix CO-235?
Check state tax rules for the item.
Can I bill the patient for CO-235?
When it comes with group code PR, the patient or a secondary payer may owe the amount. When it comes with CO, the provider writes it off.
Which group codes come with CARC 235?
Most often CO (contractual obligation) or PR (patient responsibility). The group code, not the reason code, says who owes the amount.
What is the difference between a CARC and a RARC?
A claim adjustment reason code (CARC) says why a claim line was paid differently than billed. A remittance advice remark code (RARC) adds detail, such as which field is missing.