Ezel / Tax Rulings / KS
KS P-2004-046 Kansas Retailers' Sales Tax 2004-08-18

Were qualifying drugs bought by veterinarians for inventory or professional use, and drugs dispensed on veterinary prescriptions, exempt from Kansas state and local sales tax?

Short answer: Yes, if the products were drugs as defined by K.S.A. 65-1626. K.S.A. 79-3606(q) exempted qualifying drugs sold to a licensed healing-arts practitioner, including a veterinarian, for inventory or use in professional services. It also exempted qualifying drugs dispensed under a prescription order by a licensed practitioner, including when a veterinary client filled the prescription at a retail pharmacy. The exemption applied to both Kansas state and local sales tax.

Apply this to your situation

This page answers the general question as of 2004. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 2004
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Private Letter Ruling (issued under K.A.R. 92-19-59). It binds the Department only as to the specific retailer who requested it and the facts stated; taxpayer-identifying details are redacted. It may not be cited or relied upon as precedent by any other person, and it ceases to be valid if a statute, regulation, or interpretation it relied upon changes substantially. Kansas state and local sales and use taxes are administered centrally by the Department, so there is no self-collected home-rule city tax outside its scope. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Qualifying drugs sold to veterinarians for inventory or professional use, and qualifying drugs dispensed under veterinary prescriptions, were exempt from Kansas state and local sales tax.

K.S.A. 79-3606(q) exempted drugs, as defined by K.S.A. 65-1626, when dispensed under a prescription order by a licensed practitioner.

The Department applied the exemption in two settings:

  • A licensed veterinarian could purchase qualifying drugs for inventory or for use while performing professional veterinary services without state or local sales tax.
  • A veterinary client could purchase a qualifying prescribed drug tax-free from a retail pharmacy when it was dispensed under the veterinarian's prescription order.

The ruling treated veterinary medicine as practice of the healing arts for this exemption, along with dentistry and optometry.

What this means for you

Veterinarians

Keep licensing, drug classification, purchase, and professional-use records supporting exempt inventory purchases.

Pharmacies

A veterinary prescription can support the exemption when the item is a statutory drug and the order meets the K.S.A. 65-1626 definition.

Suppliers

Not every animal-health product is necessarily a “drug.” Confirm the statutory definition before treating a sale as exempt.

Common questions

Q: Could a veterinarian buy qualifying drugs for office inventory tax-free?
A: Yes.

Q: Did the exemption include drugs used during professional services?
A: Yes.

Q: Could a client fill the veterinarian's prescription at a local pharmacy without sales tax?
A: Yes, for a qualifying drug dispensed under a qualifying prescription order.

Q: Did the exemption cover local sales tax too?
A: Yes.

Citations and references

  • K.S.A. 79-3606(q) — prescription-drug exemption
  • K.S.A. 65-1626 — definitions of “drug” and “prescription order”

Source

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

August 18, 2004

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Dear Mr. TTTTTT:

We wish to acknowledge receipt of your letter dated October 29, 2003, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3606(q) provides an exemption from the Kansas sales tax for the sale of drugs, as defined by K.S.A. 65-1626, dispensed pursuant to a prescription order, as defined by K.S.A. 65-1626, by a licensed practitioner.

The Kansas Department of Revenue has determined that sales of drugs, as defined by K.S.A. 65-1626, to a person licensed to practice the healing arts, to include dentistry, optometry, and veterinary medicine, for said person's inventory or for use in the performance of his or her professional services would fall within the exemption under K.S.A. 79-3606(q). Therefore, such sales of drugs to licensed practitioners would be exempt from Kansas state and local sales tax. This would include, but not be limited to, drugs that are purchased by a veterinarian from your local TTTTTTTTTT.

Additionally, the provisions of K.S.A. 79-3606(q) would also exempt from sales tax the sale of drugs, as defined by K.S.A. 65-1626, when dispensed pursuant to a prescription order by a person licensed to practice the healing arts, to include dentistry, optometry and veterinary medicine. If your client takes this respective prescription order to their local Walgreens, the purchase could be made tax exempt.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling.

If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 09/13/2004 Date Modified: 09/13/2004

Table 1

Ruling Number: P-2004-046

Table 2

Tax Type: Kansas Retailers' Sales Tax
Brief Description: Purchase of drugs and pharmaceuticals by veterinarians.
Keywords:
Approval Date: 08/18/2004

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