Tax Type
Retail Sales and Use Tax
Description
Prescription medicine exemption
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
11-04-1987
November 4, 1987
Re: Ruling Request/ Sales and Use Tax
Dear ****************
This will reply to your letter of August 24, 1987 seeking a ruling from the Tax Commissioner on the application of the sales and use tax to prescription drug sales or charges for physicians services. In addition, you ask whether there are any other special taxes or charges levied on sales of prescription drugs or physicians services. The Tax Commissioner has asked that I respond to your inquiries.
Section 58.1-608(21) of the Virginia Code provides an exemption from the tax for, "[m]edicines, drugs, hypodermic syringes, artificial eyes, contact lenses, eyeglasses and hearing aids dispensed by or sold on prescriptions or work orders of licensed physicians, dentists, optometrists, ophthalmologists, opticians, audiologists, hearing aid dealers and fitters, and veterinarians; and controlled drugs purchased by a licensed physician for use in his professional practice."
Accordingly, the tax does not apply to sales of medicines, drugs, etc., sold on prescriptions or work orders of licensed physicians, etc.
In addition, §58.1-608(2) of the Virginia Code provides an exemption from the tax for " [p]rofessional, insurance, or personal service transactions which involve sales as inconsequential elements for which no separate charges are made."(Emphasis added)
Therefore, professional services provided by licensed physicians are not subject to the tax. Furthermore, no special taxes or charges are levied on sales of prescription drugs, or physicians services in Virginia.
For your future reference I have also enclosed copies of Virginia Sales and Use Tax Regulations 630-10-65 and 630-10-83 which provide more detailed information on the application of the tax to a variety of transactions involving medicines, drugs, and durable medical equipment, and to both charges and purchases made by physicians and other "practitioners of the healing arts".
I hope that the foregoing and the enclosed information will be of assistance to you, but let me know if you have any further questions.
Sincerely,
Danny M. Payne, Director
Tax Policy Division
Rulings of the Tax Commissioner