Document Number
98-98
Bulletin Number
VTB 98-4
Tax Type
Retail Sales and Use Tax
Description
Exemption for nonprescription drugs and proprietary medicines
Topic
Exemptions
Taxable Transactions
Date Issued
05-15-1998
Tax Bulletin 13-5 updates and supersedes this Tax Bulletin (VTB) 98-4

Virginia Department of Taxation

May 15, 1998

Retail Sales and Use Tax: Exemption for Nonprescription Drugs
and Proprietary Medicines

Effective July 1, 1998, nonprescription drugs and proprietary medicines will be exempt from the retail sales and use tax. "Nonprescription drugs" include any substances or mixture of substances containing medicines or drugs for which no prescription is required and which are generally sold for internal or topical use in the cure, mitigation, treatment, or prevention of disease in human beings. This exemption is also applicable to "proprietary medicines" which is any nonprescription drug sold to the general public under the brand name or trade name of the manufacturer and which does not contain any controlled substance or marijuana.

The exemption for nonprescription drugs and proprietary medicines does not apply to:

(1) cosmetics - articles applied to the body for cleansing, beautifying, promoting attractiveness or altering the appearance (includes makeup, body lotions, cold creams, and hair restoration products);

(2) toilet articles -articles advertised or held out for sale for grooming purposes (includes soaps, toothpastes, hair sprays, shaving products, colognes, deodorants, and mouthwashes);

(3) food products and supplements - including those classified as such by the Federal Food and Drug Administration (includes herbal teas, drinks, pills, or supplements, diet aids, and weight control preparations);

(4) vitamins and mineral concentrates sold as dietary supplements or adjuncts (except when sold pursuant to a written prescription by a licensed physician, nurse practitioner, or physician's assistant); and

(5) devices - includes contraceptive items, birth control preparations, and testing kits. Diabetic testing kits will continue to be exempt under a separate exemption for specific medical equipment.

This exemption is applicable regardless of the nature of the purchaser. Thus, nonprescription drugs and proprietary medicines may be purchased tax exempt by individuals, physicians, medical facilities, and all other entities. Retail dealers making sales of nonprescription drugs and proprietary medicines must keep records segregating purchases and sales of exempt items.

In addition, effective July 1, 1998, samples of nonprescription drugs and proprietary medicines distributed free of charge by the manufacturer are exempt from the sales and use tax. Currently, pharmaceutical manufacturers are subject to the use tax, based on the cost price, of samples distributed in Virginia by their salespersons.

Tax Status of Various Types of Nonprescription Drugs and Proprietary Medicines

Examples of taxable and exempt nonprescription drugs and proprietary medicines are listed below. This list is intended as a guide and is not intended to be all inclusive.

Exempt item
  • Acne products
  • Alcohol, rubbing
  • Alcohol swabs
  • Allergy relief products
  • Analgesics
  • Anesthetics
  • Antacids
  • Antibiotic ointments
  • Antifungals
  • Antihistamines
  • Antimalarials
  • Antinauseants
  • Antiseptics
  • Aspirin
  • Asthma preparations
  • Baby powder (medicated)
  • Bee sting relievers
  • Benzoin
  • Boric acid ointment
  • Burn remedies
  • Calamine lotion
  • Camphor
  • Castor oil
  • Cathartics
  • Cod liver oil
  • Cold capsules and remedies
  • Cold/canker sore preparations
  • Contact lens lubricating and wetting solutions
  • Cough and cold items, cough drops, cough syrups
  • Dandruff and seborrhea preparations
  • Decongestants
  • Diarrhea aids and remedies
  • Digestive aids
  • Disinfectant (for use in humans)
  • Diuretics
  • Earache/earwax removal preparations
  • Eczema preparations
  • Epsom salts
  • Expectorants
  • Eye drops, lotions, ointments and washes for healing, treatment or therapeutic use
  • Fever blister aids
  • First aid healing agents, cleaners
  • Fluoride rinses and antiseptic dental washes
  • Foot care products for treatment of infections (callous removers, medicated corn plasters, ingrown toenail preparations, athlete's foot treatments)
  • Fungicides (for use on humans)
  • Glucose tablets
  • Glycerine products intended for medical use
  • Hay fever aid products
  • Headache relief aid products
  • Hemorrhoidal treatments
  • Hydrogen peroxide
  • Ibuprofen
  • Insect bite and sting preparations
  • Iodine, tincture of
  • Itch, rash relievers
  • Laxatives
  • Lice products used to kill lice that infect humans
  • Liniments
  • Lip balms, ices and salves (medicated)
  • Lotions (medicated)
  • Menstrual cramp relievers
  • Mercurochrome
  • Milk of Magnesia
  • Mineral oil
  • Motion sickness remedies
  • Mouthwashes (antiseptic)
  • Muscle ache relievers
  • Nasal drops and sprays
  • Nicotine supplements (that treat nicotine withdrawal symptoms)
  • Oil of wintergreen
  • Pain relievers (oral or topical)
  • Parasiticides (for humans)
  • Peroxide (medicinal)
  • Poison ivy and oak preparations
  • Powder (medicated)
  • Rectal preparations
  • Shampoos (medicated)
  • Shaving products (medicated)
  • Sinus relievers
  • Sitz bath solutions
  • Skin irritation relievers (medicated)
  • Sleep aids (inducers)
  • Soap - germicidal, surgical, therapeutic (used for medical treatment)
  • Styptic pencils
  • Sunburn lotions
  • Sunscreen (containing SPF protection)
  • Suppositories, except contraceptives
  • Teething preparations
  • Throat lozenges (medicated)
  • Tooth desensitizers
  • Toothache relievers
  • Upset stomach relievers
  • Vaginal infection remedies
  • Wart removers
  • Witch hazel
  • Worming treatments (humans)
  • Zinc oxide ointments
Taxable item
    • Adhesive bandages, dressings and cotton
    • Adhesive removers
    • Adhesive tape
    • Appetite suppressants
    • Bath crystals, milks, oils, and powder
    • Birth control preparations
    • Breath fresheners and sweeteners
    • Bubble bath
    • Bunions, corn pads (nonmedicated)
    • Cleaning creams and lotions
    • Contact lens cleaning solutions and disinfectants
    • Cosmetics
    • Cotton applicators, rolls, balls and swabs
    • Cuticle softener, removers
    • Denture adhesives, cleaners, preparations
    • Deodorants, antiperspirants
    • Depilatories
    • Dental floss
    • Diet aids
    • Dietary foods, supplements and substitutes
    • Distilled water
    • Exfoliants
    • Hair restoration products
    • Herbal teas, drinks, pills, or powder supplements
    • Household disinfectants and insecticides
    • Infant formula
    • Mouthwashes (other than antiseptic)
    • Pet medical supplies
    • Pet medicines
    • Petroleum jelly
    • Prophylactics
    • Pumice powder
    • Saline solution
    • Sanitary napkins, tampons and similar items
    • Shampoos (nonmedicated)
    • Shaving products (nonmedicated)
    • Skin bleaches
    • Soaps, generally
    • Stimulants
    • Suntan lotion (without SPF protection)
    • Talcum powder
    • Testing kits (except diabetic test kits)
    • Thermometers
    • Toothpastes, polishes, powders, whiteners
    • Vitamins and mineral supplements
    • Wax
    • Weight control preparations
    • Wrinkle removing and concealing preparations


    Background

    The 1990 General Assembly passed Senate Bill 317 (Chapter 117, 1990 Acts of Assembly) to provide an exemption from the sales and use tax for nonprescription drugs and proprietary medicines purchased for the cure, mitigation, treatment, or prevention of disease in human beings. The exemption was originally to be effective July 1, 1992. However, the effective date has been deferred every two years since 1992, with the last action passed in 1996, when the exemption's effective date was deferred to July 1, 1998. Subsequently, no action has been taken by the General Assembly to defer the effective date again; therefore, the exemption is effective July 1, 1998.

    The 1997 General Assembly passed House Bill 1665 (Chapter 696, 1997 Acts of Assembly) which expanded this exemption to samples of nonprescription drugs and proprietary medicines distributed free of charge by the manufacturer, including packaging materials and constituent elements and ingredients. The effective date of this exemption coincides with the effective date of the exemption for nonprescription drugs and proprietary medicines.

    For additional information: If there are any questions about whether or not a particular item qualifies for exemption, please contact the Office of Customer Services, Virginia Department of Taxation, (804) 367-8037.

    Tax Bulletin 13-5 updates and supersedes this Tax Bulletin (VTB) 98-4

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    Last Updated 09/16/2014 16:40