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