When must a Louisiana veterinarian pay or collect sales tax on drugs, devices, and pet merchandise?

Plain-English summary

Louisiana Revenue Ruling 12-003 separated a veterinarian's nontaxable professional services from taxable drugs, treatment devices, and merchandise.

Examination, diagnosis, and treatment services were not subject to sales tax. But unless a specific exemption applied, the veterinarian was the final consumer of medications and devices administered during treatment and owed tax on their cost.

When the clinic transferred medication, a treatment device, or merchandise to the animal owner for later use, it made a taxable retail sale and had to collect tax on the full sales price.

Professional services were not taxable

The ruling excluded the veterinarian's charges for examining, diagnosing, and treating animals from sales tax.

That service treatment did not make every related item exempt. The ruling said the drug, orthotic, prosthetic-device, and patient-aid exemptions in La. R.S. 47:305(D) did not extend to property prescribed, used, or sold in caring for animals.

Items administered by the veterinarian

The veterinarian was the final consumer of medications and treatment devices administered during treatment.

Unless an item was specifically exempt or excluded, tax was due on the veterinarian's cost price under La. R.S. 47:301(3). The clinic did not treat the administered item as a separate retail sale to the owner under the ruling.

Livestock drugs and animal feed

The ruling identified two specific exemptions:

• pharmaceuticals administered to livestock used for agricultural purposes were exempt, subject to the exception referenced in La. R.S. 47:301(16)(f); and
• feed and feed additives used to sustain animals held primarily for commercial, business, or agricultural use were exempt under La. R.S. 47:305(A)(4).

Items sold to animal owners

Medication and treatment devices handed to an owner for the owner to administer were taxable retail sales. The same rule applied to merchandise such as flea collars and leashes.

The veterinarian had to:

• itemize those retail sales separately from professional services; and
• collect sales tax on the full sales price under La. R.S. 47:301(13).

Dealer and use-tax duties

The ruling treated veterinarians as dealers who had to register with the Department for sales-tax purposes.

They also had to remit use tax when a vendor failed to collect the proper tax on clinic purchases and report collected tax from retail sales on sales-tax returns.

What this means for you

Veterinary clinics

Separate professional-service charges from take-home drugs, devices, and merchandise. Track tax paid on supplies the clinic consumes during treatment.

Livestock veterinarians and producers

Confirm that the animal and product meet the agricultural livestock exemption described in the ruling before treating a pharmaceutical as exempt.

Accountants and bookkeepers

Use separate accounting categories for administered supplies, exempt livestock items, nontaxable services, and taxable retail transfers to owners.

Common questions

Q: Are veterinary examinations and treatment services taxable?

A: No. The ruling treated the professional services themselves as nontaxable.

Q: Who pays tax on a drug administered in the clinic?

A: Unless exempt, the veterinarian was the final consumer and tax was due on the clinic's cost price.

Q: What if the owner takes the medication home?

A: That transfer was a taxable retail sale. The veterinarian had to separately itemize it and collect tax on the full sales price.

Q: Do human drug and medical-device exemptions apply to animal care?

A: No. The ruling said the exemptions it cited in La. R.S. 47:305(D) could not be extended to veterinary property.

Citations and references

• La. R.S. 47:301(16)(f) — referenced limitation involving livestock pharmaceuticals
• La. R.S. 47:305(A)(4) — feed and feed additive exemption
• La. R.S. 47:305(D) — drug, orthotic, prosthetic-device, and patient-aid exemptions not extended to animals
• La. R.S. 47:301(3) — cost price for items consumed by the veterinarian
• La. R.S. 47:301(13) — sales price for retail items transferred to owners
• LAC 61:III.101(C) — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 12-003

Original ruling text

Revenue Ruling No. 12-003
May 24, 2012
Sales Tax
Tax Collection by Veterinarians
The professional services of veterinarians in examining, diagnosing, and treating animals are not
subject to the sales tax. Neither are the sales and use of pharmaceuticals administered to
livestock used for agricultural purposes, except as otherwise provided in R.S. 47:301(16)(f).
Sales of feed and feed additives for the purpose of sustaining animals which are held primarily
for commercial, business, or agricultural use are exempted from taxation by R.S. 47:305 A(4).
However, other pharmaceuticals, drugs, treatment devices, and tangible personal property used
by veterinarians or furnished by veterinarians to animal owners, as a part of the professional
services, are subject to sales and use tax. (The various exemptions found in R.S. 47:305 D,
involving drugs, orthotic and prosthetic devices, and patient aids, cannot be extended to property
prescribed, used, or sold by veterinarians in the care and treatment of animals.)
Veterinarians are considered the final consumers of all medications and treatment devices that
they administer during treatment. Unless specifically exempted or excluded from taxation, tax
will be due on the cost price as defined in R.S. 47:301(3).
Veterinarian may also sell medication and treatment devices to be administered by animal
owners, along with merchandise such as flea collars and leashes. Any of these items transferred
to the animal owners, but not administered by the veterinarians, shall be considered sales at retail
subject to sales taxes. Veterinarians are required to itemize such retail sales separately from their
professional services, and to collect sales tax on the full “sales price” in accordance with R.S.
47:301(13).
Veterinarians are considered dealers who must register with the Department for sales tax
purposes. As dealers, veterinarians are required to remit use taxes directly to the state when the
vendor fails to collect proper tax on purchases, and they must report sales taxes on retail sales on
sales tax returns.

Cynthia Bridges
Secretary

A Revenue Ruling is issued under the authority of LAC 61III.101 C. A Revenue Ruling is written to provide
guidance to the public and to Department of Revenue employees. It is a written statement issued to apply principles
of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not binding on
the public. It is a statement of the department's position and is binding on the department until superseded or
modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.