Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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425.0000 PRESCRIPTION MEDICINES—Regulation 1591

Annotation 425.0495

(b) SPECIFIC ITEMS CLASSIFIED.

425.0495 Magnevist. This is described as a contrast media for enhancing M.R.I. (magnetic resonance imaging) image of the brain and spine. Magnevist is a clear, colorless to slightly yellow solution which is injected into the patient in doses up to 20 ml. The labels state that Federal law prohibits dispensing the product without a prescription.

Diagnostic products that are intended for use by internal application to the human body in the diagnosis of disease qualify as "medicines". Magnevist qualifies as a "medicine." However, to qualify for the exemption, the medicine must also be sold or furnished in accordance with Regulation 1591(d).

The company, besides selling to doctors and hospitals, also sells the products to clinical laboratories and diagnostic facilities. Sales of prescription medicines to medical facilities which do not admit patients for stays of 24 hours or longer are not covered by the prescription medicines exemption. Clinical laboratories and diagnostic facilities generally do not admit patients for stays of 24 hours or longer. As a result, sales to doctors and hospitals are exempt from tax while sales to clinical laboratories and diagnostic centers are not exempt from tax. Whether or not sales of a product are exempt from tax as a prescription medicine depends on both the nature of the product and its use. 11/20/91. (Am. 2005–2).