Tax Type
Retail Sales and Use Tax
Description
Dietary foods and supplements
Topic
Exemptions
Property Subject to Tax
Date Issued
02-21-1991
February 21, 1991
Re: §58.1-1821 Application: Sales and Use Tax
Dear********************
This will reply to your letter of December 20, 1990 in which you contest a recent sales and use tax assessment, and specifically the imposition of the tax to certain sales of medicinal dietary food by your client, ******************** (the "Taxpayer").
FACTS
The Taxpayer distributes its products, dietary foods, only to licensed physicians for resale to patients under carefully supervised medical programs. Patients cannot purchase the products over the counter. Both the Federal Trade Commission and the American Dietetic Association require that the food sold by the Taxpayer only be sold through physicians for resale and consumption by patients, thus you maintain that it should be exempt from the sales and use tax as a "medicine" under Va. Code § 58.1-608(7)(a). You point out that the product is exempt in some other states.
You are seeking refund of taxes and interest previously paid by the Taxpayer.
DETERMINATION
The department has previously ruled, in P.D. 90-61 (4/12/90), copy enclosed, that dietary supplements/foods do not qualify for exemption from the retail sales and use tax as a medicine or drug under Va. Code § 58.1-608(7)(a).
As the ruling letter explains, while the terms "medicines" and "drugs" are not defined for purposes of the Virginia Retail Sales and Use Tax Act, both the Virginia Drug Control Act and the Federal Food, Drug, and Cosmetic Act, specifically exclude "food" from the definition of the term "drug". In addition, under principles established by the courts, exemptions from the sales and use tax are strictly construed. Thus, absent a statutory exemption that would specifically allow dietary foods to be sold free from the tax, the department has no authority to grant such an exemption.
Accordingly, I find no basis for refund of taxes and interest previously paid by the Taxpayer.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner