Tax Type
Retail Sales and Use Tax
Description
Intrauterine Copper Contraceptive Devices; Medicine and Drugs
Topic
Exemptions
Medicine and Drugs
Date Issued
06-27-2013
June 27, 2013
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****:
This is in response to your letter in which you request a ruling on the application of the retail sales and use tax on a product manufactured and sold by ***** (the "Taxpayer").
FACTS
The Taxpayer is a manufacturer of the product *****, an intrauterine copper contraceptive device (IUD). ***** releases copper ions into the body that cause contraceptive effects. The Taxpayer questions the Department's determination in Public Document (P.D.) 01-180 (10/31/01) that intrauterine copper contraceptive devices are not classified as medical devices for sales tax purposes. The Taxpayer states that ***** is approved by the federal Food and Drug Administration (the "FDA") as a prescription drug and believes that the device qualifies for the sales and use tax exemption in Va. Code § 58.1-609.10 9.
RULING
Intrauterine Copper Contraceptive Devices
In P.D. 01-180, the taxpayer operated as a physicians' practice offering obstetric and gynecological services. At issue was the tax assessed on the taxpayer's purchases of intrauterine copper contraceptive devices (the "devices") provided by the taxpayer in the provision of its services. The taxpayer took the position that the devices meet the criteria of durable medical equipment and qualify for exemption from the tax. The Tax Commissioner ruled that the exemption in Va. Code § 58.1-609.10 10 (formally Va. Code § 58.1-609.7 2) did not apply to these purchases because the devices did not meet all of the criteria set out in the statute. The issue of whether or not the devices were classified as prescription drugs was not raised by the taxpayer and, therefore, not addressed in that case.
Medicines and Drugs
Virginia Code § 58.1-609.10 9 provides an exemption from the retail sales and use tax for:
-
- Medicines [and] drugs . . . dispensed by or sold on prescriptions or work orders of licensed physicians . . . controlled drugs purchased for use by a licensed physician, dentist, optometrist, licensed nurse practitioner, or licensed physician assistant in his professional practice, regardless of whether such practice is organized as a sole proprietorship, partnership, or professional corporation, or any other type of corporation in which the shareholders and operators are all licensed physicians, optometrists, licensed nurse practitioners, or licensed physician assistants engaged in the practice of medicine, optometry, or nursing; medicines and drugs purchased for use or consumption by a licensed hospital, nursing home, clinic, or similar corporation not otherwise exempt under this section . . . . "
The Department considers the FDA guidelines in the classification of products for purposes of the above exemption. Based on the FDA guidelines reviewed by the Department, ***** is classified by the FDA as a prescription drug. The Virginia Board of Pharmacy concurs with the federal classification and deems ***** a Schedule VI controlled substance under the Virginia Drug Control Act found in Va. Code Title 54.1, Chapter 34. Pursuant to Va. Code § 58.1-609.10 9, the Taxpayer may sell ***** exempt of the tax to a licensed physician, licensed nurse practitioner, or licensed physician assistant for use in his or her professional practice.
I trust the foregoing responds to your inquiry. This ruling is based on the facts provided as summarized above. Any change in facts or the introduction of new facts may lead to a different result.
The Code of Virginia section and public document cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions concerning this ruling, please contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
-
-
-
-
-
-
-
- Sincerely,
-
-
-
-
-
-
Craig M. Burns
Tax Commissioner
AR/1-5400149991.T
Rulings of the Tax Commissioner