taxes

Sales Tax Exemptions for Healthcare Items

Over-the-Counter Drugs, Medicines, First Aid Supplies and Supplements

Drugs and Medicines

A drug or medicine is defined as a product (other than an appliance, device or food product) that is

  • applied to the human body;
  • ingested or inhaled by humans; and
  • intended or marketed for the diagnosis, cure, mitigation, treatment or prevention of disease, illness, injury or pain.

Over-the-counter (OTC) drugs and medicines do not require a prescription.

Exemption

OTC drugs and medicines labeled with a Drug Facts panel in accordance with the regulations of the federal Food and Drug Administration (FDA) are exempt from sales tax.

If a product meets the definition of a drug or medicine, but does not have a Drug Facts label, a physician must prescribe or dispense the drug or medicine for it to be exempt.

Only OTC drugs and medicines designed for humans are exempt from sales tax. Drugs and medicines for animals, such as flea repellants and de-wormers, are exempt from tax only when purchased with a veterinarian’s prescription. The sale of all other nonprescription drugs and medicines purchased for use in the treatment of animals is taxable.

Examples of Exempt OTC Drugs and Medicines

Listed below are examples of OTC products with a Drug Facts panel that qualify for sales tax exemption. This list is intended as a guide and does not include all tax-exempt OTC products:

  • acne treatment products
  • allergy treatment products
  • analgesics
  • antacids
  • anti-diarrhea and anti-nausea products
  • anti-fungal products
  • anti-rheumatic products
  • anti-vomiting products and vomiting inducements
  • antibacterial personal care items (hand sanitizer, wipes, soap)
  • antibiotic topical ointments
  • antihistamines
  • antiperspirants
  • antiseptic sprays, creams and lozenges
  • bronchodilator and anti-asthmatic products
  • cold remedies
  • cough suppressants
  • dandruff products (medicated)
  • dental products (medicated), such as toothpaste, mouthwash, mouth rinse
  • ear care products
  • eye drops (medicated)
  • hemorrhoid products
  • insect bite treatments
  • laxatives
  • nicotine gum or patches and smoking cessation aids
  • pain relievers such as acet¬aminophen, aspirin, and ibuprofen
  • sedatives and sleep aids
  • sunscreen
  • toothache treatments

Wound Care Dressings and Supplies

A wound care dressing is an item that is applied direct¬ly to or inside a wound to

  • absorb wound drainage;
  • protect healing tissue;
  • maintain a moist or dry wound environment (as appropriate); or
  • prevent bacterial contamination.

Exemption

Wound care dressings and supplies are exempt from sales tax and can be purchased tax free without a prescription.

Examples of Exempt Wound Care Dressings and Supplies

Listed below are examples of exempt wound care dressings and supplies. This list is intended as a guide and does not include all tax-exempt wound care dressings and supplies:

  • adhesive bandages (including strip adhesive bandag¬es, large adhesive bandages and butterfly closures)
  • corn cushions
  • gauze rolls and pads
  • liquid bandage products
  • medical tape

Dietary and Nutritional Supplements

A dietary or nutritional supplement is a product that:

  • contains one or more vitamins, minerals, herbs, botanicals, amino acids or substances to increase calorie intake;
  • is not represented as a food or the sole item of a meal or diet; and
  • is labeled, or required to be labeled, “dietary sup¬plement” or “supplement.”

A product that does not meet the previous three criteria will also be considered a dietary supplement if the product is labeled, or required to be labeled, with a Supplement Facts panel in accordance with FDA regulations.

Exemption

Dietary and nutritional supplements are exempt from sales tax and can be purchased tax free.

Examples of Exempt Dietary and Nutritional Supplements

Listed below are examples of exempt dietary and nutritional supplements. This list is intended as a guide and does not include all tax-exempt dietary and nutritional supplements:

  • vitamins
  • certain herbal supplements
  • certain energy drinks
Example of Non-Exempt Supplements

Products containing cannabidiol (CBD) are not classified as dietary or nutritional supplements. CBD or products containing CBD are not eligible for the dietary and nutritional supplement exemption from sales and use tax. These products should not be labeled as supplements. This exclusion reflects FDA guidance.


94-155
(05/2020)