Tax Type
Retail Sales and Use Tax
Description
Veterinarians; Farm animals
Topic
Taxability of Persons and Transactions
Date Issued
11-09-1987
November 9, 1987
Request for Ruling/Sales and Use Tax
Dear ***************
This will reply to your letter of July 31 1987 in which you request a ruling on the application of the sales and use tax to articles sold to farmers for use in agricultural production for market.
As with other professionals, veterinarians are generally regarded to be the taxable users or consumers of all tangible personal property used in their practices. Taxable article of this type might include medicines or drugs purchased by the veterinarian for use in administering treatment to animals including farm animals. In this regard the department has traditionally not made a distinction between veterinarians who deal primarily with farm animals and those who deal primarily with non-farm animals.
When a veterinarian goes beyond the rendition of his professional service and actually sells goods at retail he will generally be required to register and collect the sales tax. One exception to this rule is when a veterinarian sells medicines or drugs at retail. Effective July 1, 1987 §58 1-608 21 of the- Code of Virginia exempts from the tax "medicines... (and) drugs... dispensed by or sold on prescriptions or work orders of...veterinarians." However, this statute also provides that "any veterinarian dispensing or selling medicines or drugs on prescription shall be deemed to be the user or consumer of all such medicines and drugs."
Bases on the above a veterinarian must himself pay the tax on all articles of tangible personal property that he will use in performing his professional services In addition he must pay the tax himself on all prescription medicines and drugs that he will dispense or sell, even in the event that a prescription will be administered to a farm animal.
Nonprescription medicines and drugs and other items that will be sold at retail may be purchased by the veterinarian under a resale exemption certificate, Form ST-10 Such nonprescription articles may also be resold to farmers exclusive of the tax provided that the articles will be used in agricultural production for market and the farmer furnishes the veterinarian an agricultural exemption certificate, Form ST-18. Accordingly veterinarians will not be placed at a competitive disadvantage to farm supply stores when selling nonprescription articles.
I trust that this will answer your concerns regarding the recent law change; however, please feel free to contact the department if you have any questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner