Are over-the-counter nasal sprays and similar non-prescription drugs subject to Kansas sales tax?

Plain-English summary

A company that sells over-the-counter nasal sprays asked whether those sales are subject to Kansas sales tax. The Department ruled that they are — there is no exemption for non-prescription drugs of this kind.

The tax. "K.S.A. 79-3603(a) imposes a sales tax upon: 'The gross receipts received from the sale of tangible personal property at retail within this state. . .'"

No exemption. "Please be advised that the Kansas sales and use tax law does not provide an exemption from sales tax on the sale of nasal sprays for symptons [sic] associated with the common cold, influenza, sinusitis, otitis media and other similar conditions. Therefore, your company would be obligated to collect and remit the appropriate Kansas sales/use tax(es) on said sales."

Rate. "The sales/use tax rate in the state of Kansas is 4.9%. In some instances, local sales tax(es) may also apply." (That 4.9% figure was the state rate in 1999; the rate has since changed — confirm the current rate before relying on it.)

What this means for you

Retailers of over-the-counter medicine

Non-prescription nasal sprays sold for the common cold, flu, sinusitis, ear infections, and similar conditions are taxable tangible personal property in Kansas. You must collect and remit Kansas sales tax on those sales.

"Drug" does not automatically mean "exempt"

Kansas exemptions for medicine are narrow and specific. This ruling makes the point that an item being a health or cold remedy does not, by itself, make it exempt — there was simply no exemption for these over-the-counter sprays.

Watch the rate and any local tax

The Department cited a 4.9% state rate in 1999 and warned that local sales taxes may also apply, so the total rate depends on where the sale is sourced. Rates change over time — use the current combined state-and-local rate.

Common questions

Q: Are over-the-counter nasal sprays taxable in Kansas?
A: Yes. The Department found no exemption for non-prescription nasal sprays for colds, flu, sinusitis, otitis media, and similar conditions, so the seller must collect and remit Kansas sales/use tax.

Q: Does it matter that the spray treats a medical condition?
A: No. The ruling turned on the absence of an applicable exemption, not on the product's medical purpose.

Q: What tax rate applies?
A: The Department cited a 4.9% state rate in 1999 and noted local sales taxes may also apply. That rate has since changed, so use the current combined rate for where the sale occurs.

Citations and references

• K.S.A. 79-3603(a) — imposes Kansas sales tax on the gross receipts from the retail sale of tangible personal property. The Department applied it, finding no exemption for over-the-counter nasal sprays, so the sales are taxable.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-07

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

January 11, 1999

TTTTTTTTTTTT
TTTTTTTTTTTT
TTTTTTTTTTTT
TTTTTTTTTTTT

Dear Ms. TTTTT:

We wish to acknowledge receipt of your letter dated January 1, 1999, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3603(a) imposes a sales tax upon: “The gross receipts received from the sale of tangible personal property at retail within this state. . .”

Please be advised that the Kansas sales and use tax law does not provide an exemption from sales tax on the sale of nasal sprays for symptons associated with the common cold, influenza, sinusitis, otitis media and other similar conditions. Therefore, your company would be obligated to collect and remit the appropriate Kansas sales/use tax(es) on said sales. The sales/use tax rate in the state of Kansas is 4.9%. In some instances, local sales tax(es) may also apply.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling. If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 01/21/1999 Date Modified: 10/11/2001

Table 1

Table 2