Other Regulatory Agency Actions

Taxes

TECHNICAL BULLETINS

TAX: Sales and Use Tax

TB-53

SUBJECT: Sales and Veterinary Supplies 2010

ISSUED: August 27, 2010

STATUTORY REFERENCE: 32 V.S.A. § 9741(3)

Introduction

Veterinary supplies are exempt from Vermont Sales Tax. 32 V.S.A. §9741(3). The term "veterinary supplies" is not defined in statute, but it is one in a list of items used in agriculture. For example, §9741(3) also exempts agriculture feeds, seed and breeding livestock. Not all items sold or used by a veterinarian are exempt from sales tax. This Bulletin describes veterinary supplies that are exempt from sales tax and other items that are subject to the tax. Vermont sales tax regulations provide additional guidance with respect to "veterinary supplies". See §1.9741(3)-1.

Veterinary supplies for farm animals

Section 9741(3) contains two parts. The first is a list of specific items related to agriculture. The second is the general category of fertilizers and pesticides - these must be "for use and consumption directly in the production for sale of tangible personal property on farms" in order to be exempt.

Exemption of veterinary supplies used to promote the health of or prevent illness in chickens, turkeys, cows, goats, sheep, pigs, and other animals raised for stock either for direct sale, or the sale of their eggs, fiber or milk products is consistent with the underlying agricultural purpose of the exemption. Horses and other draft animals are also considered agricultural animals and all veterinary supplies used in their care are exempt from the sales tax. The sales of all items directly related to promoting, maintaining or restoring the health of farm animals are exempt from the sales tax. Examples of exempt items include:

• Medications and all devices used for the delivery of medications

• Animal identification supplies (such as ear tags)

• Diagnostic kits

• Wormers

• Antibiotics

• Mineral supplements

Veterinary supplies used by a veterinarian

Veterinarians use both supplies and equipment in the treatment of animals. Typically, supplies are items that are consumed or disposed of after a limited number of uses. These types of supplies include splints, casts, syringes, and medicines. These items are exempt as long as they have a direct medical use. Although supplies are frequently differentiated from equipment in tax law, in the context of this exemption, equipment designed and used for the purpose of diagnosis and treatment of animals is also considered a veterinarian supply. Equipment such as blood testing apparatus, x-ray machines and surgical instruments similar to those used for the treatment of humans are exempt from the sales tax when used by a veterinarian.

Supplies used in a veterinarian practice but not for the direct treatment of animals, such as office supplies, are not exempt from the sales tax.

Veterinary supplies for pets

Supplies used by a veterinarian for the diagnosis and treatment of illnesses in non farm domesticated animals such as dogs and cats are considered veterinary supplies and exempt from the sales tax. Some medications are also available from non-veterinarian sources and are considered veterinary supplies.

Items sold by a veterinarian that are not directly related to the health of the pet are subject to tax. Generally, this means that if an item sold to pet owners by a veterinarian is available from a non veterinary retail vendor, it is not exempt. For example, pet food that is available from non veterinary retail vendors is not exempt. Nutritional supplements including items such as chondroitin glucosamine and vitamins are different from medications and are considered pet food for the purpose of sales taxation.

Examples of items that are subject to the sales tax include:

• Collars

• Pet food bowls for food or water

• Pet carriers

• Brushes and combs for grooming

• Nail trimmers

• Shampoos

• Pet food

• Flea and tick repellents

• Food supplements

Examples of items sold to pet owners that are exempt from sales tax include:

• Medication (including preventive medications such as heartworm prevention)

• Prosthetics

Veterinarians as retail sellers

Veterinarians that sell either pet foods or pet supplies that are subject to the sales tax are required to register with the Vermont Department of Taxes for a Sales Tax license.

Use of Technical Bulletins

A technical bulletin provides general information to the public and does not replace the need for competent legal or accounting advice. This technical bulletin supersedes all prior department pronouncements on this subject.

Prepared by:

Approved:

Ken Jones
Policy Analyst

Ellen Tofferi
Acting Commissioner of Taxes