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The second hal o understanding the taxability o prescription drugs is the issuance o a prescription. Most states require that a prescription be issued by a licensed physician. O course each state is dierent, with some requiring a doctor’s prescription while others expand this requirement with the term health proessional. Most states have specifc language in their laws limiting the exempt taxability o prescription drugs only to those or human use. However, there are a ew jurisdictions which also exempt the sale o drugs or animal use. Taxware has developed content to capture these distinctions and to help you apply the correct tax in each relevant jurisdiction. Taxware | 200 Ballardvale St. 4th Floor | Wilmington | MA | 01887 | 866.890.3970 | ino@taxware.com Taxware is a registered trademark of Taxware, LLC. As discussed above, some states consider OTC drugs as medicine. A number o states also provide blanket exemptions or any drug sold pursuant to a prescription, including OTC drugs. For example, Kentucky exempts both drugs which require a prescription and OTC drugs or which a prescription was issued. Likewise, Michigan exempts the sale o OTC drugs rom sales tax, sold pursuant to a prescription, but still applies use tax to these types o transactions. Some states merely exempt all types o medicines regardless o whether or not they are a prescription. Over-the-Counter (OTC) Drugs Prescriptions Florida Maryland Minnesota New Jersey New York Pennsylvania Texas Vermont Virginia States that exempt all types of medicines regardless of whether or not they are a prescription: Taxware has created system content that captures each state’s particular rules and defnitions. Within our tax determination systems, we have created content that automates tax calculations encompassing everything rom very specifc types o drugs to more general drugs or human (and even animal) use.
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