Missouri Confirms that Sales of Prescription-Only Drugs Are Exempt

Tuesday, May 22nd, 2012

 
 
Share
Link
Missouri
General

The Missouri Department of Revenue (DOR) recently released a pair of letter rulings confirming that sales of drugs that may only be dispensed under a prescription are exempt. Mo. Ltr. Rul. No. LR 7033 (Dept. of Revenue Feb. 9, 2012); Mo. Ltr. Rul. No. LR 7082 (Dept. of Revenue Apr. 13, 2012).

In the first of these letter rulings, LR 7033, the party that requested the ruling had produced a new prescription drug that it was selling directly to physicians for use in their practice. That drug has an active ingredient, is approved by the U.S. Food and Drug Administration (FDA), and is the same type of drug that may be sold to a licensed pharmacist for sale as a prescription drug. The issue in LR 7033 was whether sales of the drug to physicians are subject to sales tax.

In the second letter ruling, LR 7082, the party that requested the ruling sells a drug that is considered a controlled substance and is classified as a prescription pharmaceutical by the FDA. Under federal law this drug may only be sold by or on the order of a licensed healthcare practitioner, and FDA regulations require that the drug's packaging be labeled with "Rx Only." The issue in LR 7082 was whether sales of the drug are subject to sales tax. Thus, the issue in both letters was essentially the same: whether sales of drugs that may only be dispensed under a prescription are subject to Missouri's sales tax.

The answer in both rulings was the same; the sales of the prescription drugs are exempt. The DOR explained that Missouri exempts "sales of drugs which may be legally dispensed by a licensed pharmacist only upon a lawful prescription of a practitioner licensed to administer those items." Mo. Rev. Stat. sec. 144.030.2(18); see also Mo. Code Regs. tit. 12, sec. 10-110.013(1), (2)(B), (3)(A). In LR 7033, in which the drug was sold to a physician and then subsequently administered to a patient, the sales of the drug to the physician qualified for this exemption because the drug is of the type that may be sold by a licensed pharmacist as a prescription drug. Similarly, the DOR ruled that the drug discussed in LR 7082 qualified for this exemption because it may only be dispensed by or on the order of a licensed healthcare practitioner.


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Service Repairs to Petroleum Storage Tanks Exempt in...

Friday, January 18th, 2019 -Louisiana's Board of Tax Appeals recently ruled that repairs on petroleum storage tanks were not taxable. ...

Nevada Exempts Feminine Hygiene Products in 2019

Wednesday, January 16th, 2019 -Last year, Nevada voters approved via ballot measure changes to the Sales and Use Tax Act of 1955. Voters amen...

Cleaning of Beer-Tap Lines Not Taxable in Ohio

Monday, January 14th, 2019 -The Supreme Court of Ohio recently ruled that cleaning beer-tap lines is not taxable. The taxpayer was...

Louisiana Court of Appeals Finds Marketplace Facilitators...

Friday, January 11th, 2019 -The Louisiana Court of Appeals has recently addressed the sales tax liability of marketplace facilitators. A c...

Iowa Supreme Court Determines Taxable Carpentry Services...

Wednesday, January 9th, 2019 -The Iowa Supreme Court has recently addressed the taxability of various installation services. The taxpayer wa...

Tax Applies to Metallurgical Coke in Illinois

Monday, January 7th, 2019 -Illinois recently ruled that use tax was due on purchases of metallurgical coke. The taxpayer was a business t...