Tax Type
Retail Sales and Use Tax
Description
Veterinarians; Medicines and drugs
Topic
Taxability of Persons and Transactions
Date Issued
11-10-1987
November 10, 1987
Re: Request for Ruling/Sales and Use Tax
Dear ******************
This will reply to your letter of August 24, 1987, in which you request a ruling on the application of the sales and use tax to your veterinary practice.
To assist you, I have enclosed a copy of Virginia Tax Bulletin 87-9, which explains the application of the tax to veterinarians. As noted in the bulletin, veterinarians are generally regarded to be the taxable users or consumers of all tangible personal property used in their practices. However, 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 "medicine...(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."
Based on this law change, you will not be required to collect the sales tax on any sales of prescription medicines or drugs that you make. However, you will be required to pay the sales tax to your suppliers or remit the use tax directly to the department on any of these medicines and drugs that you purchase. In addition, as noted in Tax Bulletin 87-9, you will be required to collect the sales tax if you maintain an inventory of nonprescription goods for sale at retail. Such goods might include flea powder, soap, pet food, and similar products.
Therefore, if you will be making any retail sales of nonprescription items, you should retain your sales tax registration and continue to file returns on a monthly basis. However, if you will not be making any taxable retail sales, you may delete your sales tax registration by contacting the department's Taxpayer Assistance Section at P. O. Box 6-L, Richmond, Virginia 23282.
I trust that this will answer your concerns; however, please feel free to contact the department if any questions arise.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner