Bulletin Number
VTB 86-4
Tax Type
Retail Sales and Use Tax
Description
Veterinarians; Retail Sales and Use Tax
Topic
Taxability of Persons and Transactions
Date Issued
02-28-1986
Section 630-10-111 of the Virginia Retail Sales and Use Tax Regulations sets forth the application of the sales and use tax to veterinarians. This tax bulletin will expand on the policy set forth in that regulation and provide specific examples of the application of the regulation to certain transactions between veterinarians and their customers.
Veterinarians Generally Provide Services
Subsection A of Regulation 630-10-111 provides that veterinarians are the taxable users or consumers of all medicines, drugs, medical supplies, equipment, and other tangible personal property used in providing their professional services. As the user or consumer of such items, a veterinarian pays the sales tax to his suppliers at the time of purchase and does not pass the tax on to his customers. Rather, a veterinarian should take the tax that he has paid on such items into account when setting the price of his services. If a supplier does not charge the sales tax on purchases of tangible personal property by a veterinarian for use in his practice, the veterinarian is required to pay the use tax directly to the Department of Taxation, either on Form ST-9 if he is registered to collect the sales tax or Form ST-7, Consumers Use Tax Return, if not registered.
A veterinarian is considered to be the taxable user or consumer of medicines, ointments, drops, and other treatments or remedies he provides in connection with his treatment of an animal that will be administered to the animal by him inside his office or by his customer outside of the veterinary office. A veterinarian is considered to be the taxable user or consumer of all items he provides to a customer in connection with his treatment of an animal even though the veterinarian may make separate charges for such items on the invoices he furnishes his customers.
As noted on page 2, certain veterinarians will be required to register and collect the sales tax when they sell tangible personal property at retail. However, those veterinarians who are not required to collect the tax are considered to be the taxable users or consumers of the property that they sell. For example, a veterinarian not required to collect the sales tax would be considered the taxable user or consumer of any medicine or drug prescription that he refills for a customer independent of the provision of any professional services on his part.
Requirement for Registration and Collection of Sales Tax on Retail Sales
When a veterinarian maintains an inventory of goods for sale to customers independent from the provision of any professional services on his part, he will be required to register with the Department of Taxation as a dealer to collect the sales tax on such sales. For instance, a veterinarian who maintains an inventory of medicines, drugs, flea collars, flea powders or spray, soap, pet food, and other tangible personal property that will be sold to customers totally independent from the provision of any professional services on his part will be required to register to collect the sales tax on those sales only. Accordingly, the sales tax will apply even when a customer returns to refill a prescription obtained during a previous veterinary examination if the veterinarian does not perform another examination or provide any other professional service to the customer.
Tangible personal property for resale to a customer may be purchased exclusive of the tax by a veterinarian when he furnishes his supplier with a resale certificate of exemption, Form ST-10. The requirement to collect the sales tax on retail sales is further explained in subsection B of Regulation 630-10-111.
A veterinarian who does not maintain an inventory of goods for retail sale to his customers and who only occasionally sells tangible personal property independent of any services on his part will not be required to register to collect the sales tax. In such cases, the veterinarian should pay the tax to his supplier or remit the use tax on the property sold.
Payment of Use Tax by Veterinarians
As noted above, a veterinarian is the taxable user or consumer of all tangible personal property (except that property which is held for taxable sale to customers) used by him in providing his professional services. This applies not only to the medicines, drugs, or other treatments that he provides to animals, but also to the computers, typewriters, office furniture and supplies, examination tables, and all other tangible personal property used in his practice.
As the taxable user or consumer of the property used in his practice, a veterinarian should pay the Virginia sales tax to his suppliers. When a supplier fails to collect the Virginia sales tax on any taxable purchase by a veterinarian, the veterinarian himself becomes liable for the use tax. Thus, the use tax would be due when a veterinarian purchases an item from an out-of-state supplier who fails to collect the Virginia sales tax. As noted above, payment of the use tax may be made on Form ST-9, if registered to collect the sales tax, or Form ST-7, if not registered.
Tangible personal property purchased for resale and withdrawn from a resale inventory for use in the practice of a veterinarian registered for the collection of the sales tax is subject to the use tax. Such tax must be remitted on Form ST-9 previously referenced. For instance, pet food purchased for resale, but used by the veterinarian to feed animals under his care, would be taxable to the veterinarian.
§58.1-634 of the Code of Virginia requires that any assessment for taxes not previously paid be made within three years from the date the taxes became due and payable. However, if a taxpayer has failed to file a return, the statute of limitations for assessment may be extended to six years.
Any veterinarian who is unsure as to the application of the sales and use tax to his practice is encouraged to submit a request for a ruling to the Tax Commissioner, P.O. Box 6-L, Richmond, Virginia 23282.
Related Documents
Tax Bulletins