Tax & Accounting Blog

Texas Sales Tax: Purchases by Veterinarians

Indirect Tax, ONESOURCE, Sales and Use Tax October 7, 2011

The Texas Comptrollers Office has issued a Policy Letter Ruling clarifying when a veterinarian’s purchases are subject to the state’s sales tax. Under Texas law certain medical products are exempt from the sales tax. Some of those exemptions apply only to products used by humans while others apply to products used by humans or animals. The Policy letter clarifies that the determination of whether an exemption for medical products applies to purchases of those items by a veterinarian is whether or not Tax Code 151.313 and/or Rule 3.284 limits the exemption to humans.

The Letter uses wound care items as one example. Rule 3.284(a)(15) defines a wound care dressing as an item that absorbs wound drainage, protects healing tissue, maintains a moist or dry wound environment (as appropriate), or prevents bacterial contamination. Rule 3.284(b)(4) states that wound care dressings are exempt from sales tax. Examples of wound care dressings would include adhesive bandages (including strip adhesive bandages, large adhesive bandages and butterfly closures), liquid bandage products, gauze rolls and pads, and medical tape. Because neither Tax Code Section 151.313 nor Rule 3.284 restricts wound care items to those items used on humans, the exemption is available for wound care items that are being purchased for use on animals.

The Ruling is available on the Texas Comptroller of Public Accounts STAR System: Texas Policy Letter Ruling 201106201L, 06/03/2011 , released September 2011