State Summary Report

 State taxes charged on veterinary sales and services

Updated May 2013

Veterinary medical associations in over 40 states and Puerto Rico responded to our request in 2003 for information on taxes charged for veterinary sales and services. Some states responded with yes/no answers while others sent comprehensive tax law packets. The regulations and exemptions on sales tax, also called retail tax, vary greatly from state to state and, in some cases, even within a state. Because of the complex rules regarding these taxes, this report provides only a general overview of sales and service taxes as they affect veterinary practices.

Most states did not send separate information on service animals or food animals vs. companion animals; therefore, this report deals mainly with taxes levied on products and services for companion animals.

Note that this information has been updated as tax laws were enacted since the survey, or more information became available.

Eight states reported that there were no taxes of any kind charged on animal products or services. 

Use tax

Nearly all states reported one form or another of a use tax charged to veterinarians. Common taxable items would be drugs, medications, syringes, and miscellaneous medical supplies (consumables) used by veterinarians in rendering professional services. The supplier collects taxes on these items at the time of purchase. Rules vary among the states as to whether any of the taxes can be passed along to consumers.

Prescription drugs and vaccines

In about half of the states, prescription drugs, vaccines, and medicated products are tax-exempt to both the veterinarian and the client when administered in a clinic or by a veterinarian while providing a medical service. Several states had rules similar to those of Kentucky, which allows drugs and health care items to be sold tax-exempt if dispensed by a veterinarian during a consultation and noted on the client record. Refills likewise charted would also be tax-exempt. A few states, however, did require clients to pay the tax if they took the prescriptions out of the clinic.

About 20 states tax prescription drugs and medications the same as any other retail sale. In some states, the consumer ultimately pays the tax. Other states consider the veterinarian to be the consumer who pays the taxes on prescriptions and medications. In Wisconsin, for instance, the veterinarian must pay sales tax to the supplier for not only prescription drugs, but also for all over-the-counter drugs or products labeled "medicated". They are not allowed to pass the tax along to clients even though the client would pay sales tax on those same "medicated" items if purchased at a retail or pet supply store.

Of the states providing specific information regarding taxes on service animals or food animal prescriptions and products, most excluded these classes from any taxes. Only three states indicated that there were no tax exemptions for these animals.

Non-prescription and OTC drugs or products

Taxes on veterinary services

Currently only three states — Hawaii, New Mexico and South Dakota, collect tax on veterinary medical services, including routine exams and vaccinations. Nine states collect taxes on ancillary services such as grooming or boarding. In Iowa, grooming services are taxed, while boarding is not.

State Tax Information Summary

STATE Sales Tax Non-prescription Products Sales Tax Companion AnimalScripts Sales Tax Food AnimalScripts Veterinary Medical Services Ancillary Services- grooming, boarding (non-medical) Additional Taxes and NotesFYI: "Use" tax indicates paid by veterinarian. "Retail" paid by consumer.
Alabama Y Y N N N Use tax on drugs administered in clinic; sales tax on scripts taken out.
Alaska N N N N N No state sales tax of any kind.
Arizona Y N N N N  
Arkansas Y N N* N Y Vaccines and medications are not subject to sales or use tax if sold to producers of livestock or poultry.
California Y N N N N  
Colorado Y* N N N N* No state tax on scripts; some municipalities do charge tax on scripts. Non-prescription agricultural compounds are subject to sales tax through 6/30/13. Exempt are vaccines for livestock, items sold and used in treatment if they leave hospital on the patient, items for insulin administration, and urine and blood testing strips and kits.
Connecticut Y N N N N Use tax on consumables used in practice, not on scripts.
Delaware N N N N N No state sales tax of any kind.
Florida Y N N N N* Use tax on taxable items and services used in practice. Items purchased for use in providing boarding or grooming, such as food, brushes and disinfectants, are taxable.
Georgia Y Y Y N N Tax on scripts is passed to consumer.
Hawaii Y Y Y Y Y 4% "excise" tax on all goods & services.
Idaho Y N N N N  
Illinois Y Y N N N DVMs pay a use tax cost of items transferred to clients as medical service. No tax or registration if there is no retail product.  Sales of prescription products that can also be purchased without a prescription in pet stores or from internet sellers are subject to sales tax. 
Indiana N* N N N Y Sales tax is due on pet foods and supplies sold for use by healthy animals, including pet identification cards, microchips, scanners, and collar tags. Free microchips are subject to use tax. Prescription diets necessary to correct a medical condition are not taxed. Separate insurance and service fees are not subject to sales tax.
Iowa Y Y N N Y* Use tax on drugs used in clinic. Retail tax on drugs taken out. *On grooming -yes, boarding - no.
Kansas Y N N N* Y* DOR 2006 letter clarifies. Pet boarding services and small animal vaccines are exempt but grooming and other non-prescription medicine/products are taxable.
Kentucky Y Y Y N N To be tax-exempt meds must be dispensed & charted during consultation.
Louisiana Y Y   N N Tax varies from district to district. Dist.6 has prof license tax of 1% of gross.
Maine Y Y N N N Use tax on drugs used in clinic. Antiseptics and cleaning agents used in commercial animal agricultural production are exempt from sales tax.
Maryland Y N N N N  
Mass. Y Y Y N N  
Michigan Y Y N* N N Use tax on drugs used in clinic. Retail tax on drugs taken out.
Minnesota Y Y N N Y All drugs and supplies are taxable either to the veterinarian or client.
Mississippi N N N N N No state sales tax of any kind.
Missouri Y N N N N In order for a prescription to qualify, it has to say "can only be legally dispensed by a licensed pharmacist only upon a lawful prescription of a practitioner licensed to administer those items". Legend drug sales which can only be sold by doctor's prescription are exempt. Non-legend drug sales which may be sold with or without a doctor's prescription are taxable. The fact that a buyer has a prescription from a doctor does not automatically exempt the sale.
Montana N N N N N No state sales tax of any kind.
Nebraska Y Y N N N* No sales tax on specialty services performed on livestock. 2009 law exempts animal grooming performed by a licensed veterinarian or a licensed veterinary technician in conjunction with medical treatment.
Nevada Y Y   N N Use tax on drugs used in clinic. Retail tax on drugs taken out.
New Hampshire N N N N N No state sales tax of any kind.
New Jersey Y Y N N Y* *Tangible items (those which a client can physically take possession of), for which a separate charge is made, are taxable to the client. Items which are not tangible (injectibles, for example), are taxable to the veterinary business. Tangible items which are not accounted for separately and are included with the professional service (sutures, bandages, etc) are taxable to the veterinary business, not to the client.
New Mexico Y Y Y Y Y* All aspects of veterinary income are taxable as "Gross Receipts Tax," except for feeding, handling or boarding livestock.
New York Y N N N Y  
No. Dakota Y Y N N N No sales tax on products for food animals.
Ohio Y* Y* N* N N Veterinarian pays sales tax when purchasing from supplier. Same for OTC, except that veterinarian collects sales tax from client for medication purchased for resale. Medications used for agricultural production are exempt.
Oklahoma Y N N N N  
Oregon N N N N N No state sales tax of any kind.
Pennsylvania N N N N N* Grooming is exempt if performed by a veterinarian for purpose of or incidental to medical treatment.
Puerto Rico N N N N N No state sales tax.
Rhode Island N N N N Y Boarding, grooming, pet  sitting, pet training, hygiene products and dietary supplements are taxable. Analgesics, hypo syringes and needles are exempt.
So. Carolina Y Y N N N  
So. Dakota Y Y Y Y Y  
Tennesssee Y Y N N N Use tax on scripts — cannot be passed to client. Client pays tax on non-script purchases.
Texas Y N N N N* Grooming for cosmetic purposes is taxable unless it's part of medical treatment.
Utah Y N N N N  
Vermont N N N N   "Veterinary supplies" are exempt from sales tax. Click here for the Tax Department's explanation of what is included in the "veterinary supplies" exemption.
Virginia Y N N N Y 2006 law exempts medicines for commercial farm animals from sales and use tax. Consumer is not charged tax on prescription diet and flea control products available only after veterinary exam is conducted.
W. Virginia Y N N N Y 2009 law specifically exempts from the consumers sales and service tax drugs purchased by veterinarians to be dispensed upon prescription for the medical treatment of animals.
Washington Y Y Y N N Scripts are exempt if administered; taxed if taken home.
Wisconsin Y* Y* N N Y Client pays tax on non-script purchases. No sales tax to client on "medicated" products purchased in clinic, but veterinarian pays sales tax.
Wyoming Y N N N N


 

Source:  Staff research, AVMA State Legislative and Regulatory Affairs Department
Contact:  Tara Southwell, State Policy Analyst, AVMA State Legislative and Regulatory Affairs Department, 847-285-6779.