As a veterinary supplier, are the animal vaccines and the regenerative medical devices I sell to veterinarians exempt from Virginia sales and use tax?

Plain-English summary

A dealer that sells drugs, animal vaccines, and "regenerative medical devices" to veterinarians asked the Department whether those items are exempt from Virginia sales and use tax. The advisory ruling splits the answer: animal vaccines qualify for exemption, but the regenerative medical devices do not.

Two veterinary exemptions. Virginia exempts (a) medicines and drugs dispensed by or sold on the prescriptions or work orders of veterinarians (Va. Code § 58.1-609.10 9), and (b) a veterinarian's own purchases of prescription medicines and drugs that are administered or dispensed within a veterinarian-client-patient relationship (Va. Code § 58.1-609.10 22). Important timing note: the subdivision-22 purchase exemption was enacted as a temporary measure, effective July 1, 2022 and set to expire July 1, 2025 — so anyone relying on it should confirm the current state of the law.

Why vaccines qualify. The sales-tax statutes don't define "medicine" or "drug," so the Department borrows the definition from Virginia's Drug Control Act (Va. Code § 54.1-3401), which includes substances "intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or animals." Animal vaccines fit that description, so — as long as the specific companion-animal vaccines meet the Drug Control Act definition — they are drugs eligible for the veterinary exemption under subdivision 22.

Why the devices don't. The regenerative medical devices are used to process an animal's own blood or bone marrow into a cell solution that helps heal conditions causing lameness. But the devices themselves contain no prescription medicine. Because they aren't medicines or drugs, they fall outside the exemption, and the dealer must collect and remit Virginia sales and use tax on those sales to veterinarians.

What this means for you

Veterinary suppliers and distributors

Sell animal vaccines and other qualifying drugs to veterinarians without tax during the exemption window, but treat equipment and devices that don't themselves contain medicine — like blood/marrow-processing devices — as taxable. The dividing line is whether the item is a medicine or drug (as defined by the Drug Control Act), not whether it's used in a medical or therapeutic process.

Veterinary practices

Your purchases of qualifying prescription medicines and drugs administered to your patients can be exempt, but confirm the exemption is still in effect — subdivision 22 was written to sunset July 1, 2025. Devices and supplies that aren't medicines remain taxable, so budget accordingly.

Tax professionals

The Department administers these exemptions through the Drug Control Act definition of "drug" (§ 54.1-3401), consistent with P.D. 11-68, 22-132, and 23-55. Test each product against that definition item by item; a therapeutic use isn't enough if the product itself isn't a medicine or drug. And watch the effective-date window on § 58.1-609.10 22.

Common questions

Q: Are animal vaccines exempt from Virginia sales tax?
A: Yes, when they meet the definition of a "drug" and are purchased and administered by a veterinarian within a veterinarian-client-patient relationship, they qualify under Va. Code § 58.1-609.10 22 (a temporary exemption effective July 1, 2022). The Department applies the Drug Control Act definition of "drug" (§ 54.1-3401), which animal vaccines meet.

Q: What about devices that process an animal's blood or bone marrow?
A: Those regenerative medical devices are taxable. They contain no prescription medicine, so they aren't "medicines or drugs" and don't qualify for the veterinary exemption — the seller must charge tax.

Q: Is the veterinary purchase exemption permanent?
A: No. The subdivision-22 exemption for veterinarians' purchases was enacted with an effective period of July 1, 2022 through July 1, 2025. Check the current statute before relying on it.

Q: The device is used to treat a real medical condition. Why is it still taxable?
A: Because the exemption turns on whether the item is a medicine or drug, not on how it's used. A device with no medicine in it doesn't qualify, even if it's part of a treatment.

Citations and references

Statutes:

• Va. Code § 58.1-203 — Department's authority to interpret and enforce the tax laws
• Va. Code § 58.1-609.10 9 — exemption for medicines and drugs dispensed by or sold on veterinarians' prescriptions or work orders
• Va. Code § 58.1-609.10 22 — temporary exemption (effective July 1, 2022 to July 1, 2025) for veterinarians' purchases of prescription medicines and drugs administered within a veterinarian-client-patient relationship
• Va. Code § 54.1-3401 — Drug Control Act definition of "drug" the Department applies to these exemptions

Authorities the Commissioner relied on (described here, not linked): prior public documents adopting the Drug Control Act definition to administer the medicine/drug exemptions (P.D. 11-68, 22-132, 23-55); and the strict-construction cases Commonwealth v. Community Motor Bus, 214 Va. 155 (1973), Commonwealth v. Research Analysis Corp., 214 Va. 161 (1973), and Golden Skillet Corp. v. Commonwealth, 214 Va. 276 (1973).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-74

Original ruling text

June 4, 2025

Re: Request for Ruling: Retail Sales and Use Tax

Dear *:

This letter is in reply to your request on behalf of * (the “Dealer”) regarding the Virginia retail sales and use tax application to all animal vaccines and regenerative medical devices purchased by veterinarians.

This ruling is based on the facts presented as summarized below. Any change in facts or the introduction of new facts may lead to a different result.

FACTS

The Dealer is engaged in the sale of prescription and non-prescription drugs and regenerative medical devices as an alternative method of treatment. Veterinarians administer the purchased vaccines “in-clinic” with a work order. The regenerative medical devices do not contain prescription medicine and are used to process blood or bone marrow aspirate from the animal to create a cell solution. The Dealer states that animal vaccines and regenerative medical devices that are purchased contain similar language restricting use to or by a licensed veterinarian. The Dealer requests a ruling on the application of the retail sales and use tax exemptions provided in Virginia Code § 58.1-609.10 22 to all vaccinations purchased and administered by veterinarians to companion animals (e.g., canine, feline, and equine) as well as regenerative medical devices.

RULING

Strict Construction of Exemptions

The Department has the authority to interpret and enforce the laws of the Commonwealth governing taxes in accordance with Virginia Code § 58.1-203. With regard to such interpretations, the Virginia Supreme Court requires strict construction of sales tax exemptions. Where there is any doubt as to the application of an exemption, the doubt is resolved against the one claiming the exemption. See Commonwealth v. Community MotorBus, 214 Va. 155 (1973); Commonwealth v. Research Analysis Corporation, 214 Va. 161 (1973); and Golden Skillet Corp. v. Commonwealth , 214 Va. 276 (1973).

Exemptions for Veterinarians

Medicines and drugs dispensed by or sold on prescriptions or work orders of veterinarians are exempt from the retail sales and use tax under Virginia Code § 58.1-609.10 9. Additionally, Virginia Code § 58.1-609.10 22 exempts veterinarians from retail sales and use tax on their purchases of prescription medicines and drugs that are administered or dispensed to patients within a veterinarian-client-patient relationship, effective beginning July 1, 2022, and ending July 1, 2025.

Vaccines

According to the request, the Dealer’s vaccinations are purchased and administered by veterinarians. The terms “medicines” and “drugs” are not defined for Virginia retail sales and use tax purposes. In order to administer these exemptions, the Department adopted definitions under Virginia’s Drug Control Act (Chapter 34 of Title 54.1, Virginia Code § 54.1-3400 et seq .). See Public Document (P.D.) 11-68 (5/11/2011), P.D. 22-132 (8/24/2022), and P.D. 23-55 (5/17/2023). Under Virginia Code § 54.1-3401, “drug” is defined, in pertinent part, as:

(ii) articles or substances intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or animals; (iii) articles or substances, other than food, intended to affect the structure or any function of the body of man or animals.

Based on this statutory definition, animal vaccines may be categorized as substances intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or animals. Therefore, as long as the companion animal vaccines listed by the Dealer meet the definition of a drug under Virginia Code § 54.1-3401, they would be considered to be drugs and qualify for the exemption pursuant to subdivision 22 of Virginia Code § 58.1-609.10.

Regenerative Medical Devices

The Dealer also sells regenerative medical devices, which are devices used by veterinarians to process collected blood or bone marrow from horses. The blood and bone marrow collected from horses using the regenerative medical devices are used in turn to develop a solution to heal issues that cause lameness. However, the devices themselves do not contain any prescription medicine. Accordingly, sales of the regenerative medical device would not be eligible for this exemption and the Dealer would be required to collect and remit retail sales and use tax on its sales to veterinarians.

The Code of Virginia sections cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this ruling, you may contact * in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at or **@tax.virginia.gov.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR/4548.F

Related Documents

11-68

22-132

23-55