Over-the-Counter Drugs and Medicines - Frequently Asked Questions
1. What is the effective date for the over-the-counter exemption for drugs and medicines?April 1, 2000
2. What are drugs and medicines?
A drug or medicine is a product that:
- is intended or marketed for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, illness, injury or pain;
- is applied to the human body or ingested or inhaled by humans;
- is not an appliance or device; and
- is not food.
An appliance or device is an instrument, apparatus, implement, machine, contrivance, implant, chemical, or other similar or related product that does not achieve its primary intended purposes through chemical action within or on the body and which is not dependent upon being metabolized for the achievement of its primary intended purposes.
Food is a material, usually of plant or animal origin, containing or consisting of essential body nutrients, that is ingested by humans for taste or aroma or to satisfy the appetite, hunger or thirst. (For more information on food, see "Ready to Eat Food" in the Sales Tax Publications section of this website.)
3. Please provide some examples of exempt over-the-counter drugs and medicines.
Examples of over-the-counter drugs and medicines include:
- acne treatment products,
- allergy treatment products,
- antibiotics,
- anti-fungal products,
- antiseptic sprays, creams, and lozenges,
- cold remedies,
- cough suppressants,
- expectorants,
- head lice treatments,
- hemorrhoid treatments,
- insect bite treatments,
- laxatives,
- medicated prophylactics,
- pain relievers, such as aspirin, ibuprofen, acetaminophen, and
- dietary supplements.
Of course, this list is not all-inclusive.
4. What types of health products will not qualify for this new exemption?Products that do not fit the definition of drugs and medicines will not qualify for this exemption. These include:
- deodorant,
- diapers,
- earplugs,
- heating pads,
- ice and heat packs,
- toothbrushes,
- vaporizers, and
- blood pressure monitors.
Of course, this list is not all inclusive.
5. What is a wound care dressing?
A wound care dressing absorbs wound drainage, protects healing tissue, maintains a moist or dry wound environment (as appropriate), and prevents bacterial contamination. It may also provide cushioned comfort at the wound site, protecting the wound from friction and shearing.
6. What is a medicated prophylactic?
A medicated prophylactic is an appliance or device that contains or is treated with a drug or medicine. The presence of the drug or medicine qualifies the prophylactic for the exemption.
7. Are baby products exempt?
All baby products are not exempt. However, baby products that contain or are treated with drugs or medicines qualify for the exemption. For example:
are tax exempt.
- medicated powders,
- medicated diaper rash treatments,
- medicated lotions and oils, and
- teething gel
On the other hand—
are still subject to sales tax.
- diapers,
- non-medicated baby wipes,
- teething rings, and
- non-medicated baby oils, lotions, and powders
8. Are dietary supplements exempt?
Yes, dietary supplements are exempt. Dietary supplements include vitamins, mineral and herbal products and are identifiable by the words "dietary supplement" or "supplement" on the label. Herbs used for cooking and herbal teas are not dietary supplements but are exempt from sales tax as food.
9. Are supplies used by diabetics exempt?
Blood glucose test strips, hypodermic syringes, needles, alcohol swatches, and insulin are exempt. Lancets and blood glucose machines are exempt from tax when the customer has a prescription for these products from a licensed physician.
10. Can an independent distributor for a direct-sales organization purchase over-the-counter drugs and medicines from a direct-sales company tax free?
Yes, if the product meets the definition of drug or medicine.
11. Are cosmetics included in this exemption?
No, only cosmetics that otherwise fit the definition of drug or medicine will qualify for this exemption. For example, medicated lip balm is marketed as a treatment for cold sores and does qualify for this exemption.
12. Are home pregnancy tests exempt?
No, pregnancy tests, home drug tests, home colon cancer tests, and other tests that are not applied to the body do not meet the definition of drug or medicine and are not exempt under this provision.
13. Household cleaners and disinfectants prevent disease. Do these products qualify for the exemption?
No, household cleaners, bleach, and disinfectants are not drugs and medicines.
14. What if a retailer is unsure whether a product is exempt?
Anyone who is unsure whether a product is exempt as an over-the-counter drug or medicine may call our tax-help hotline, 1-800-252-5555, for more information.
