Is a veterinarian's purchase of canine heart worm diagnostic test kits subject to Texas sales tax?

Subject

Reagents — Diagnostic Test Used By Veterinarians To Detect Dogs/Cats Diseases

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9308060L

Plain-English Summary

A practicing veterinarian wrote to the Comptroller's Tax Policy Division asking about sales tax on diagnostic test kits called Assure/CH, which are used in the clinic to detect canine heart worms in blood samples. The veterinarian explained that the kits are used up in the clinic (run on the blood of canines, not sold to clients for home use), and that any materials left over after the tests are completed are disposed of, with a new kit purchased for the next use. Up until July 27, 1993, the distributor selling the kits had not been charging sales tax on them, but had started charging tax as of that date.

The Comptroller's response, from Al Van Allen of the Tax Administration Division, is short and direct: the distributor is correct in charging tax on the kits. The letter states that this is not a change in policy, and that the kits were not previously exempt — implying the distributor's earlier failure to collect tax had been an error, not evidence of a tax-exempt status for the kits.

As with other STAR letters, the response notes that it is rendered based on the facts submitted, and that other facts, though similar, may yield different results.

What This Means For You

Veterinary clinics buying consumable test supplies. If you run a veterinary practice and purchase diagnostic test kits or similar consumable supplies that are used up during in-clinic procedures (not resold to clients), this letter indicates the Comptroller treats such kits as taxable tangible personal property — there is no special exemption described in the letter for veterinary diagnostic test kits.

A distributor's failure to previously charge tax does not mean the item is exempt. The letter specifically addresses a situation where a distributor started charging tax after not having done so before, and confirms that the newly-added tax collection reflects the kits' actual (and unchanged) taxable status, not a new tax or new policy.

This is a narrow, facts-based opinion. The letter itself cautions that it is based on the specific facts submitted (the Assure/CH kit and how it's used), and that other facts, even if similar, could yield a different result. It should not be read as a blanket rule for all veterinary or medical diagnostic products.

Q&A

Q: Are canine heart worm diagnostic test kits (Assure/CH) subject to Texas sales tax?
A: Yes. The letter states that the distributor is correct in charging tax on the kits.

Q: Is this a new tax that just started being applied to these kits?
A: No. The letter states this is not a change in policy — the kits were not previously exempt, even though the distributor had not been charging tax on them until July 27, 1993.

Q: Does it matter that the test kits are used up in the clinic and not resold to clients?
A: The veterinarian's letter noted that the tests are run in the clinic on canine blood and are not sold to clients for personal use at home, with leftover materials disposed of after use. The Comptroller's response does not address this distinction separately — it simply confirms the kits are taxable.

Q: Who requested this ruling?
A: A practicing veterinarian, identified in the letter only by redacted name and city, who was buying and using the Assure/CH kits in their clinic.

Q: Can another veterinarian or business rely on this exact letter for their own tax situation?
A: The letter states the opinion is rendered based on the facts submitted, and that other facts, though similar, may yield different results — so it is specific to the facts presented in this letter.

Original ruling text

August 11, 1993

Dear **:

Thank you for your recent letter regarding the taxability of diagnostic test
kits used in the detection of canine heart worms.

The distributor is correct in charging tax on the kits. This is not a change in
policy. They were not previously exempt.

This opinion is rendered based on the facts you submitted. Other facts, though
similar, may yield different results.

if you have questions or need more information, please call or write. You may
reach me by calling toll free, (800) 531 -5441 (ext. 34680). My direct line
number is (512) 463-4680. The number for FAX transmissions is (512) 475-0900.
You may write to me in care of Tax Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

August 9, 1993

Tax Policy Division
Capitol Station
Comptroller of Public Accounts
Austin, Texas 78774

To whom it may concern:

I am a practicing veterinarian in the city of **, Texas and have a
question for you if you can help me.

For several weeks, we have been buying and using diagnostic test kits for the
detection of canine heart worms in the blood. These test kits are called
Assure/CH (a copy of the instructions and ingredients of this kit are included
for your review). Up until July 27, 1993, the distributor who sells us this kit
had not charged us any sales tax on it, but now does.

Is this a new sales tax on these diagnostic test kits, or was the distributor
supposed to be collecting the sales tax all along? These tests are run in the
clinic on the blood of canines and are not sold to clients for their own
personal use at home. Any materials left over after all the tests are completed
are disposed of, and a new kit has to be purchased .

Any assistance or information you have about this sales tax would be
appreciated.

Thank you.

Sincerely,

**, DVM