Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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425.0000 PRESCRIPTION MEDICINES—Regulation 1591

Annotation 425.0045


425.0045 Experimental Medicines. A taxpayer is in the business of developing new medicines. Initially, the medicines are used in controlled studies to investigate their safety and efficiency. The experimental medicines are administered by licensed physicians. No charge is made to the patients. While the experimental medicines qualify as "medicines," the raw materials are not resold because the medicines are not resold. The raw materials are consumed by the taxpayer in the process of developing new medicines. Accordingly, tax applies to the raw materials. 4/2/94. (Am. 2002–2).

(Note: Statutory change effective 1/1/95 which added paragraph (a)(6) to section 6369 is not reflected in this opinion.)