Are glucose tablets, lancets, and alcohol swabs subject to Kansas sales tax?

Plain-English summary

A seller asked whether the sale of glucose tablets, lancets, and alcohol swabs is subject to Kansas sales tax.

Read this ruling carefully — its text is internally inconsistent. It gives two answers that are not reconciled:

• It opens by saying "yes." The letter states the answer is yes, and cites the general imposition of tax in K.S.A. 79-3603(a) ("The gross receipts received from the sale of tangible personal property at retail within this state ...").
• Then it says the items are exempt. The next paragraph states: "Kansas law does exempt the sale of drugs and insulin. The items listed in your letter do qualify for a sales tax exemption in Kansas." It then quotes the two exemption statutes it relies on: K.S.A. 79-3606(p), which exempts sales of drugs dispensed pursuant to a prescription order by a licensed or mid-level practitioner (as defined by K.S.A. 65-1626), and K.S.A. 79-3606(q), which exempts sales of insulin dispensed for the treatment of diabetes.

The letter does not explain how the opening "yes" squares with the later statement that the items "do qualify for a sales tax exemption." Because the two answers conflict on the face of the document, this page does not pick one as the ruling's holding.

Practical takeaway: If you have the same facts, do not rely on either sentence alone. Note that the exemptions the letter quotes are keyed to prescription drugs and insulin, which may not fit every over-the-counter diabetic-testing supply, and confirm the current treatment directly with the Kansas Department of Revenue.

What this means for you

Sellers of diabetic-testing and over-the-counter supplies

Do not treat this letter as a clear yes-or-no answer — it states both. The drug exemption it cites (K.S.A. 79-3606(p)) applies to drugs dispensed pursuant to a prescription, and the insulin exemption (K.S.A. 79-3606(q)) applies to insulin; whether a particular over-the-counter item qualifies depends on those definitions.

Everyone relying on a private letter ruling

A private letter ruling binds the Department only as to the taxpayer and facts it was issued for, and this one is internally inconsistent — a strong reason to get your own confirmation from the Department before relying on it.

Common questions

Q: Does this ruling say the items are taxable or exempt?
A: It says both. It opens by answering "yes" (taxable under K.S.A. 79-3603(a)) and then states the items "do qualify for a sales tax exemption," citing K.S.A. 79-3606(p) and (q). The letter does not reconcile the two.

Q: What exemptions does it cite?
A: K.S.A. 79-3606(p) for drugs dispensed pursuant to a prescription order, and K.S.A. 79-3606(q) for insulin dispensed for the treatment of diabetes.

Q: So what should I do?
A: Because the letter is contradictory, confirm the current treatment of your specific items with the Kansas Department of Revenue rather than relying on this ruling.

Citations and references

• K.S.A. 79-3603(a) — the general imposition of Kansas sales tax on gross receipts from retail sales of tangible personal property; cited for the letter's opening "yes."
• K.S.A. 79-3606(p) — exempts sales of drugs dispensed pursuant to a prescription order by a licensed or mid-level practitioner; quoted for the letter's statement that the items "do qualify for a sales tax exemption."
• K.S.A. 79-3606(q) — exempts sales of insulin dispensed for the treatment of diabetes.
• K.S.A. 65-1626 — the definition of "mid-level practitioner" referenced in the K.S.A. 79-3606(p) drug exemption.

Source

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2004-011

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

April 27, 2004

XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXX

Dear Sirs:

The purpose of this letter is to respond to your request dated March 29, 2004. In it you asked if the sale of glucose tablets, lancets and alcohol swabs are subject to Kansas retailers’ sales tax. The answer to question is yes.

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 . . .”

Kansas law does exempt the sale of drugs and insulin. The items listed in your letter do qualify for a sales tax exemption in Kansas.

K.S.A. 79-3606(p) exempts from sales tax: “all sales of drugs dispensed pursuant to a prescription order by a licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-1626, and amendments thereto. As used in this subsection, "drug" means a compound, substance or preparation and any component of a compound, substance or preparation, other than food and food ingredients, dietary supplements or alcoholic beverages, recognized in the official United States pharmacopoeia, official homeopathic pharmacopoeia of the United States or official national formulary, and supplement to any of them, intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease or intended to affect the structure or any function of the body;”

K.S.A. 79-3606(q) “all sales of insulin dispensed by a person licensed by the state board of pharmacy to a person for treatment of diabetes at the direction of a person licensed to practice medicine by the board of healing arts;”

This is a private letter ruling pursuant to K.A.R. 92-19-59, based on the representations you have made. To the extent those representations are incomplete or inaccurate, this ruling is void. This ruling will be revoked by operation of law without further department action if there is a change in the controlling statutes, administrative regulations, revenue rulings or case law that materially effects this determination.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 04/30/2004 Date Modified: 04/30/2004

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