201107164L 



July 15, 2011

**************
**************

AWM 11173371

Dear **************,

Thank you for your Tax Help inquiry regarding the purchase of prescription 
drugs by a veterinarian.

A drug which is prescribed by a veterinarian is not subject to Texas sales and 
use tax. An out-of-state company that has representation in Texas should not 
collect Texas sales tax on drugs that will be prescribed by a veterinarian. If 
your client is purchasing items that meet the definition of a drug or medicine 
(outlined below), they can issue an exemption certificate to their supplier 
stating that the items being purchased meet the definition of a drug or 
medicine and will be prescribed by a veterinarian. Again, this is for Texas 
tax. I am not able to give advice on another state’s tax regulations.

The Texas Tax Code provides for certain exemptions for some medicines as well 
as some medical equipment. Some of the exemptions pertain to items only used 
for humans and some exemptions pertain to items that are also used for animals. 
Drugs and medicines are regulated by Texas Tax Code section 151.313 and Rule 
3.284, DRUGS, MEDICINES, MEDICAL EQUIPMENT, AND DEVICES.

DRUGS AND MEDICINES PRESCRIBED BY A VETERINARIAN

For Texas tax purposes, a drug or medicine is defined in Texas Tax Code 151.313 
as a product (other than an appliance, device or food for human consumption) 
that is:

* applied to the body; 
* ingested or inhaled 
* intended or marketed for the diagnosis, cure, mitigation, treatment or 
prevention of disease, illness, injury or pain. 

An item that meets the definition of a drug or medicine is exempt from sales 
tax when it is prescribed or dispensed by a veterinarian. “Prescribing” means 
that the veterinarian would either have to give the patient a written 
prescription to purchase the items elsewhere or sell the item under a written 
or oral prescription. An “oral prescription” means that the course of treatment 
is noted on a patient’s records and that the qualifying drug or medicine is 
applied during the course of treating the medical condition presented by the 
patient. To “dispense” the product means to apply the product to the patient 
during the course of treating the medical condition presented by the patient or 
to give the product to the patient during the course of treating the medical 
condition presented by the patient.

The following list contains examples of items that would meet the definition of 
a drug or medicine and would be exempt when prescribed or dispensed by a 
veterinarian. The list is intended as a guide and does not include all items 
that would be exempt as a prescribed drug or medicine:

- Drugs that are labeled for use only by or on the order of a licensed
veterinarian

- Flea & Tick prevention which are applied to the pet (sprays, dips, shampoos, 
powders, liquids)

- Food designed for animals *

- Dietary supplements & vitamins

- Toothpaste & dental rinses (does not include toothbrushes or dental tools)

- Ear cleansers/drops/rinses

- Eye drops

- Skin medications

* FOOD FOR ANIMALS

As a clarification, food prescribed by a veterinarian does not have to be food 
that can ONLY be purchased and dispensed by a veterinarian. Food that can be 
purchased over the counter would still be exempt when sold under a 
veterinarian’s prescription; however, food that is sold to walk-in customers 
and not under a prescription is subject to sales tax.

The entire text of the Tax Code, a complete set of rules, and a wealth of other 
information can be found on our Window on State Government website by going to 
http://www.window.state.tx.us/taxinfo/sales/. 

You may also wish to utilize our State Tax Automated Research (STAR) system, 
which provides access to numerous letter rulings, policy decisions, hearings 
and other documents on this subject as well as other subjects related to Texas 
taxes. This site may be found at http://cpastar2.cpa.state.tx.us/index.html. 

If you need more information, please e-mail tax.help@cpa.state.tx.us, or call 
toll-free (800) 531-5441.

This opinion is based on the information presented. Other information, though 
similar, may provide a different result.

Sign up for e-mail updates on the Comptroller topics of your choice at 
http://www.window.state.tx.us/subscribe.  Add topics to your subscription or 
stop subscriptions at any time.

Our goal is to provide you with prompt, professional service.  Please take a 
moment to complete our on-line survey at:
http://aixtcp.cpa.state.tx.us/surveys/tpsurv2/index.html

Sincerely,


Melissa Brogan
Tax Policy Division



From: **************
Sent: Wednesday, June 22, 2011 11:56 AM
To: Tax Help

Question: ARIZONA BASED PHARMACY SELLS PRESCRIPTION DRUGS FOR ANIMALS
(CATS, DOGS, HORSES). CUSTOMER IN TEXAS CALLS NUMBER IN ARIZONA AND
PRESCRIPTION DRUGS ARE SHIPPED FROM THE ARIZONA LOCATION TO THE CUSTOMER
IN TEXAS. IS THE SALE OF PRESCRIPTION DRUGS FOR ANIMALS A TAXABLE
TRANSACTION? IS THE SALE OF PRESCRIPTION DRUGS FOR ANIMALS BY A COMPANY
BASED IN ARIZONA TO A CUSTOMER IN TEXAS A TAXABLE TRANSACTION? IF A
TAXABLE TRANSACTION, WHAT IS THE RATE?




ACCESSION NUMBER: 201107164L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 07/15/2011
TAX TYPE: SALES