A store buys dog food from a veterinarian to resell — can it claim a credit for the sales tax shown on the vet's invoice?

Plain-English summary

J. Leon Lascoff & Son, Inc., a pharmacy, buys dog food from a veterinarian and resells it at retail from its store. The veterinarian buys the dog food from a third-party supplier and is billed directly, with the sales tax separately stated. The veterinarian doesn't issue its own invoice to Lascoff — it just hands over a copy of the supplier's invoice, on which Lascoff's name never appears. Lascoff asked whether it can claim a credit on its own sales tax return for the sales tax shown on that invoice.

The Department said no. Ordinarily, buying goods to resell is exempt if the buyer gives the supplier a resale certificate (ST-120). But this transaction is a special exception created by § 1115(f) and § 528.24:

• A veterinarian's purchase of tangible personal property "designed for use in some manner relating to domestic animals" (like dog food) is deemed a retail sale — it is taxed when the veterinarian buys it, even though the vet later resells it.
• Because of that, the veterinarian's subsequent sale to Lascoff is not a taxable sale.

So the sales tax on the invoice was imposed on the veterinarian's purchase from the supplier — not on Lascoff. Since Lascoff never paid sales tax on its own purchase, there is nothing for it to credit on its return. Separately, the Department noted that Lascoff's own retail sales of the dog food are subject to state and local sales tax, which Lascoff must collect.

What this means for you

The veterinarian rule breaks the normal resale chain

For most goods, tax is collected once, at the final retail sale, and everyone in between buys for resale tax-free. Section 1115(f) flips that for pet-related property sold through veterinarians: the tax is charged at the vet's purchase, and sales down the line aren't taxed — except the ultimate retail sale to the consumer. If you buy inventory from a vet, don't expect the usual resale-certificate mechanics to apply.

You can only credit tax that was imposed on you

A credit or refund is for tax you paid. Tax shown on someone else's invoice — here, the vet's own purchase tax — isn't yours to reclaim, even if the vet passes the cost along to you economically. Watch whose purchase the tax was actually imposed on before claiming a credit.

You still collect tax on your retail sales

Even though this purchase didn't generate a creditable tax for Lascoff, Lascoff's retail sales of the dog food to customers are fully taxable. The pharmacy remains responsible for charging and remitting sales tax on what it sells.

Common questions

Q: Can I use a resale certificate to buy pet products tax-free from a veterinarian?
A: No. Under § 1115(f), the vet's purchase is deemed the taxable retail sale, so the resale-certificate route doesn't apply to your purchase from the vet.

Q: Can I credit the sales tax printed on the vet's invoice?
A: No. That tax was imposed on the veterinarian's purchase, not yours. You didn't pay sales tax on your purchase, so there's nothing to credit.

Q: Do I still charge tax when I resell the dog food?
A: Yes. Your retail sales to customers are subject to state and local sales tax, which you must collect.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(4) — definition of retail sale; resale exclusion
• Tax Law § 1105(a) — tax on retail sales of tangible personal property
• Tax Law § 1115(f) — veterinarian sales of pet-related property; a vet's purchase is not a sale for resale
• 20 NYCRR § 528.24 — services rendered by veterinarians; a vet's purchase is deemed a taxable retail sale

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1990.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a90_50s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-90(50)S
Sales Tax
October 22, 1990

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S900823A

On August 23, 1990, a Petition for Advisory Opinion was received from J. Leon Lascoff &
Son, Inc., 1209 Lexington Avenue, New York, New York 10028.
The issue raised by Petitioner, J. Leon Lascoff & Son, Inc., is whether a credit may be
claimed on Petitioner's sales tax return for sales tax shown on billing presented to Petitioner by
Petitioner's supplier where Petitioner is purchasing such dog food for the purpose of reselling it at
retail.
Petitioner purchases dog food from a veterinarian for the purpose of reselling such dog food
at Petitioner's business location. The veterinarian purchases the dog food from a third party supplier
and is billed directly for such purchases by the supplier. The billing invoice received by the
veterinarian separately states the total receipts and the amount of sales tax to be collected from the
veterinarian by the third party supplier.
The veterinarian does not bill Petitioner on the veterinarian's own billing invoices but instead
furnishes Petitioner a copy of the billing received from the third party supplier. No reference to
Petitioner appears on such invoices.
Section 1101 of the Tax Law states, in part:
Definitions.
(b) When used in this article for the purposes of the taxes imposed by subdivisions
(a), (b), (c) and (d) of section eleven hundred five and by section eleven hundred ten,
the following terms shall mean:
(4) Retail sale. (i) A sale of tangible personal property to any person for any
purpose, other than (A) for resale...
Section 1105 of the Tax Law states, in part:
Imposition of sales tax. - ... there is hereby imposed and there shall be paid a tax ...
upon:
(a) The receipts from every retail sale of tangible personal property ...
Section 1115 (f) of the Tax Law states, in part:
... Articles of tangible personal property designed for use in some manner relating to
domestic animals or poultry, when sold by such a veterinarian, shall not be subject
to tax under subdivision (a) of section eleven hundred five or under section eleven

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TSB-A-90(50)S
Sales Tax
October 22, 1990

hundred ten. However, the sale of any such articles of tangible personal property to
a veterinarian shall not be deemed a sale for resale within the meaning of paragraph
(4) of subdivision (b) of section eleven hundred one and shall not be exempt from
retail sales tax.
Section 528.24 of the Sales and Use Tax Regulations states, in part:
Services rendered by veterinarians. [Tax Law, §1115 (f)]
(c) Purchase by a veterinarian.
(2) The purchase by a veterinarian of tangible personal property designed for use in
some manner relating to domestic animals ... is deemed a retail sale, notwithstanding
a subsequent sale of such items by the veterinarian.
Example 1: The purchase of ... food ..., whether used by a veterinarian in
performing a service or sold to others, is subject to tax at the
time of purchase by a veterinarian.
Example 2: The sale by a veterinarian of ... food ... directly related to the
well-being of animals and pets is not subject to tax.
Generally, when Petitioner enters into a transaction to purchase taxable tangible personal
property for the purpose of reselling such tangible personal property, the transaction will be
considered a purchase for resale and will not be subject to New York State or local sales tax
provided Petitioner furnishes the supplier a properly completed form ST-120, Resale Certificate.
However, the instant transaction is an exception to this rule since Petitioner is purchasing the
dog food from a veterinarian. Under the provisions of Section 1115(f) of the Tax Law and Section
528.24 of the Sales and Use Tax Regulations, the veterinarian's purchase of the dog food is deemed
to be a retail sale as defined under Section 1101(b)(4) of the Tax Law and therefore subject to the
tax imposed under Section 1105(a) of the Tax Law. Further, in accordance with the provisions of
Section 1115(f) of the Tax Law and Section 528.24 of the Sales and Use Tax Regulations, the
veterinarian's subsequent sale of the dog food to Petitioner is not considered to be a sale subject to
sales tax.
Moreover, the amount of sales tax stated on the invoice provided to Petitioner represents sales
tax which was imposed on the sale of the dog food to the veterinarian and which must be collected
by the supplier. Accordingly, since such sales tax was not imposed directly on Petitioner, Petitioner
has not paid sales tax on its purchases of the dog food. Therefore, a credit for such sales tax may not
be claimed on Petitioner's sales tax return.

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TSB-A-90(50)S
Sales Tax
October 22, 1990

It is noted that Petitioner's subsequent retail sales of the dog food will be subject to State and
local sales taxes and Petitioner will be liable for collecting such tax.

DATED: October 22, 1990

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.