Medicines, drugs, eyeglasses, and related items

# A.

Definitions. The following words and terms when used in this section shall have the following meanings unless the context clearly indicates otherwise:

"Controlled drugs" means medicines or drugs for which the manufacture, distribution, and dispensation are strictly regulated by both state and federal laws due to the potential for abuse and physical and psychological dependence. Controlled drugs are separated into six schedules and itemized under et seq. Article 5 (§ 54.1-3443 et seq.) of Title 54.1 of the Code of Virginia. For purposes of this definition, "controlled drugs" does not include devices.

"Cosmetics" means articles applied to the body for cleansing, beautifying, promoting attractiveness, or altering the appearance including makeup, body lotions, cold creams, and hair restoration products.

"Devices" means instruments, apparatuses, and contrivances, including their components, parts, and accessories, intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in human beings or to affect the structure or any function of the human body. A partial list of devices that the federal Food and Drug Administration recognizes is provided at 21 CFR Part 862.

"Drug" means (i) articles or substances recognized in the official United States Pharmacopoeia National Formulary or official Homeopathic Pharmacopoeia of the United States, or any supplement to any of them; (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; (iv) articles or substances intended for use as a component of any article specified in clause (i), (ii), or (iii) of this definition; or (v) a biological product. For purposes of this definition, "drug" includes oxygen and other medical gases, but does not include devices or their components, parts, or accessories.

"Durable medical equipment" means medical equipment that meets all of the following requirements: (i) can withstand repeated use; (ii) is primarily and customarily used to serve a medical purpose; (iii) generally is not useful to a person in the absence of illness or injury; and (iv) is appropriate for use in the home.

"Glycolic acid products" means cosmetic items used to smooth or lighten skin or to remove age spots and wrinkles for the purpose of promoting attractiveness or altering the appearance.

"Hemodialysis" means a renal replacement therapy method of removing waste products as well as free water from the blood when the kidneys are incapable of removing these wastes.

"Homeopathic product" means a product derived from the system of medical practice that treats a disease by the administration of minute doses of a remedy that would, in larger amounts, produce in healthy persons, symptoms similar to those of the disease.

"Licensed physician" means a person licensed as a medical doctor. For purposes of this definition, a "licensed physician" does not include a veterinarian, chiropractor, optician, optometrist, or similar person.

"Nonprescription drug" means a substance or mixture of substances containing medicines or drugs for which no prescription is required and that is generally sold for internal or topical use in the cure, mitigation, treatment, or prevention of disease in human beings.

"Peritoneal dialysis" means a renal replacement therapy method of removing waste from the blood, as well as excess fluid, when the kidneys are incapable of removing these wastes, by instilling a specially formulated dialysis fluid around the peritoneal membrane that surrounds the intestine.

"Prescription" means an order for drugs or medical supplies written or signed or transmitted by word of mouth, telephone, telegraph, Internet, or other means of communication to a pharmacist by a duly licensed physician, dentist, veterinarian, or other practitioner authorized by law to prescribe and administer drugs or medical supplies.

"Proprietary medicine" means any nonprescription drug that is sold to the general public under the brand name or trade name of the manufacturer and that does not contain any controlled substance or marijuana.

"Prosthetic device" means any device that replaces a missing part or function of the body. For purposes of this section, a prosthetic device includes any supplies physically connected to the device.

"Toilet articles" means articles advertised or held out for sale for grooming purposes including toothpastes, hairsprays, shaving products, colognes, and deodorants.

# B.

Generally. Purchases of the following items are exempt from the retail sales and use tax:

# 1.

Controlled drugs that a licensed physician, licensed optometrist, licensed nurse practitioner, or licensed physician assistant purchases for use in his professional practice;

# 2.

Medicines, drugs, hypodermic syringes, artificial eyes, contact lenses, eyeglasses, and hearing aids that a licensed physician, dentist, optometrist, ophthalmologist, optician, audiologist, hearing aid dealer or fitter, nurse practitioner, physician assistant, or veterinarian dispenses or sells on prescriptions or work orders;

# 3.

Medicines and drugs that a licensed hospital, nursing home, clinic, or similar corporation purchases for its use and consumption;

# 4.

Medicines and drugs that a retailer purchases in order to fill a prescription, provided the purchase is made under a certificate of exemption, Form ST-10;

# 5.

Nonprescription medicines or drugs and proprietary medicines or drugs regardless of the nature of the purchaser;

# 6.

Samples of nonprescription drugs and proprietary medicines that a manufacturer distributes free of charge;

# 7.

Eyeglass cases, contact lens storage containers, all solutions or sterilization kits, or other devices applicable to the wearing or maintenance of contact lenses or eyeglasses, provided these items are purchased by optometrists, ophthalmologists, and opticians and distributed free of charge to their patients;

# 8.

Eyeglasses that a consumer purchases on prescription of a licensed physician, ophthalmologist, or optometrist;

# 9.

Eyeglass frames sold in connection with the repair or replacement of prescription eyeglasses;

# 10.

Durable medical equipment, devices, and related parts and supplies, provided the equipment, parts, and supplies are purchased by or on behalf of an individual for use by that individual. Purchases of durable medical equipment, parts, and supplies made by a licensed hospital or nursing home conducted for profit or by a licensed physician for use in his professional practice remain subject to tax;

# 11.

Hemodialysis and peritoneal dialysis equipment, supplies, and drugs used in dialysis regardless of the nature of the purchaser;

# 12.

Samples of prescription drugs that a pharmaceutical manufacturer distributes to licensed physicians, hospitals, pharmacies, and other health care facilities pursuant to a written request;

# 13.

Medicines and drugs that a veterinarian purchases for use in caring for, medicating, or treating agricultural production animals; and

# 14.

Medical products and supplies that a Medicaid recipient purchases through a Department of Medical Assistance Services provider agreement.

# C.

Medicines and drugs, specifically.

# 1.

Medicines and drugs sold on prescriptions. Consumers may purchase medicines or drugs on prescriptions issued by licensed physicians, dentists, optometrists, ophthalmologists, opticians, audiologists, hearing aid dealers and fitters, nurse practitioners, physician assistants, and veterinarians exempt from the sales and use tax. Medicines and drugs purchased pursuant to an oral prescription made by any of these licensed professionals are exempt from the tax, provided the prescription is reduced to writing, signed by the pharmacist, and filed in the same manner as an original written prescription. Medicines or drugs sold pursuant to the refilling of a prescription by any of these licensed professionals are also exempt from the tax. Sellers making sales of medicines or drugs pursuant to these prescriptions or refills must keep sales records segregating the prescription sales. All original prescriptions must be filed and kept available for the Department of Taxation's inspection. When a pharmacist refills a prescription, the seller's records of the refill must carry the number of the original prescription for reference.

# 2.

Controlled drugs sold to certain health care providers. A licensed physician, licensed optometrist, licensed nurse practitioner, or licensed physician assistant may purchase controlled drugs for use in his professional practice exempt from the retail sales and use tax. The Department of Taxation will look to the purchasers on the invoice that supports the transaction to determine whether the controlled drug exemption applies. When an invoice includes any of the licensed practitioners as the purchaser, this is sufficient to demonstrate that the purchase was made by the qualifying party for use in his professional practice. The use of a Drug Enforcement Agency number is also sufficient.

# 3.

Medicines and drugs sold to licensed hospitals and similar facilities. Licensed hospitals, nursing homes, clinics, and similar facilities may purchase medicines and drugs for their use and consumption exempt from the retail sales and use tax. For more information concerning hospitals and nursing homes, see 23VAC10-210-720.

# 4.

Medicines and drugs purchased for resale. A retailer may purchase drugs that will be used to fill or refill prescriptions exempt of the retail sales and use tax, provided the retailer presents the supplier with a certificate of exemption, Form ST-10, at the time of purchase.

# D.

Nonprescription drugs and proprietary drugs.

# 1.

Nonprescription medicines or drugs and proprietary medicines and drugs purchased for the cure, mitigation, treatment, or prevention of disease in human beings may be purchased exempt of the retail sales and use tax regardless of the nature of the purchaser. No certificate of exemption is necessary to utilize the exemption.

# 2.

In order to be deemed an exempt nonprescription drug, the item at issue must (i) contain a nonprescription drug or proprietary medicine; (ii) be sold for internal or topical use; (iii) be sold for the cure, mitigation, treatment, or prevention of disease in human beings; and (iv) fall outside of the excluded categories set forth in subdivision 3 of this subsection. Products that require over-the-counter registration are deemed exempt nonprescription drugs or medicines if they meet these requirements.

# 3.

The exemption for nonprescription drugs and proprietary medicines does not apply to the following categories of items:

a. Cosmetics;

b. Toilet articles;

c. Food products and supplements classified as such by the federal Food and Drug Administration;

d. Vitamins and mineral concentrates sold as dietary supplements or adjuncts, except when sold pursuant to a written prescription by a licensed physician, nurse practitioner, or physician's assistant;

e. Devices, including contraceptive items, birth control preparations, and testing kits. However, a separate exemption is available for diabetic testing kits under subsection F of this section;

f. Products listing natural or herbal ingredients as the active components unless the items contain a nonprescription drug or proprietary medicine and treat, cure, or prevent disease in human beings;

g. Items containing nonprescription drugs or other medicinal ingredients that serve a secondary function to the intended use of the product, such as toothpaste with nonprescription drugs added to prevent gingivitis.

# 4.

Following is a list of nonprescription drugs and proprietary medicines that qualify for exemption based on their status as nonprescription drugs or proprietary medicines. This list is intended as a guide and is not intended to be all inclusive.

Acne products

Headache relief aid products

Alcohol, rubbing

Hemorrhoidal treatments

Alcohol swabs

Hydrogen peroxide

Allergy relief products

Ibuprofen

Analgesics

Insect bite and sting preparations

Anesthetics

Iodine

Antacids

Itch and rash relievers

Antibiotic ointments

Laxatives

Antifungals

Lice products used to kill lice that infect humans

Antihistamines

Liniments

Antimalarials

Lip balms, ice and salves, medicated

Antinauseants

Lotions, medicated

Antiseptics

Menstrual cramp relievers

Aspirin

Mercurochrome

Asthma preparations

Milk of Magnesia

Baby powder, medicated

Mineral oil

Bandages, gauze, or swabs, provided these items contain antiseptic or bacterial control products in the pad

Motion sickness remedies

Bee sting relievers

Mouthwashes containing antiseptic

Benzoin

Muscle ache relievers

Boric acid ointment

Nasal drops and sprays

Burn remedies

Nicotine supplements that treat nicotine withdrawal symptoms

Calamine lotion

Oil of wintergreen

Camphor

Pain relievers, oral or topical

Castor oil

Parasiticides for humans

Cathartics

Peroxide, medicinal

Cold or canker sore preparations

Poison ivy and oak preparations

Cold capsules and remedies

Powder, medicated

Contact lens lubricating and wetting solutions for insertion directly into the eye

Rectal preparations

Contraceptive creams containing nonprescription drugs and intended to treat a disease

Shampoos, medicated

Cough and cold items, cough drops, cough syrups

Sinus relievers

Dandruff and seborrhea preparations

Sitz bath solutions

Decongestants

Skin irritation relievers

Diarrhea remedies

Sleep aids and sleep inducers

Digestive aids

Soap, including germicidal, surgical, therapeutic, or other soaps used for medical treatment

Disinfectant for use on or about the human body

Styptic pencils

Diuretics

Sunburn lotions

Earache and earwax removal preparations

Sunscreen containing SPF protection

Eczema preparations

Suppositories, excluding contraceptives

Epsom salts

Teething preparations

Expectorants

Throat lozenges, medicated

Eye drops, lotions, ointments, and washes for healing, treatment, or therapeutic use

Tooth desensitizers

Fever blister aids

Toothache relievers

First aid healing agents, cleaners

Upset stomach relievers

Fluoride rinses and antiseptic dental washes

Vaginal infection remedies

Foot care products for treatments of infections, medicated callous or corn removers, ingrown toenail preparations, and athlete's foot treatments

Wart removers

Fungicides for human use

Witch hazel

Glucose tablets

Worming treatments for human use humans

Glycerine products intended for medical use

Zinc oxide ointments

Hay fever aid products

# 5.

Following is a list of items that do not qualify as nonprescription drugs or proprietary medicines. These items may qualify for another retail sales and use tax exemption. This list is intended as a guide and is not intended to be all inclusive.

Adhesive bandages, dressings, and cotton

Household disinfectants and insecticides

Adhesive removers

Infant formula

Adhesive tape

Insect repellant

Ammonia

Mouthwashes, excluding antiseptic mouthwashes

Appetite suppressants

Nutraceutical products

Bath crystals, milks, oils and powder

Oral electrolyte mixtures for rehydration

Birth control preparations

Pet medical supplies

Breath fresheners and sweeteners

Pet medicines

Bubble bath

Petroleum jelly

Bunions or corn pads, unless medicated

Powders, nonmedicated

Cleaning creams and lotions

Prophylactics

Cod liver oil

Pumice powder

Contact lens cleaning solutions and disinfectants, unless designed to be applied directly in the eye

Saline solution

Cosmetics, whether or not containing medicinal properties or acne treatments

Sanitary napkins, tampons, and similar items

Cotton applicators, rolls, balls, and swabs

Shampoos, nonmedicated

Cuticle softener

Shaving products

Denture adhesives, cleaners, and preparations

Skin bleaches

Deodorants and antiperspirants

Soaps for general use

Depilatories

Stimulants

Dental floss and threaders

Suntan lotion without SPF protection

Diet aids

Talcum powder

Dietary foods, supplements, and substitutes

Testing kits

Distilled water

Thermometers

Exfoliants

Toothpastes, polishes, powders, and whiteners, including products containing fluoride or peroxide

Glycolic acid products

Vitamins and mineral supplements

Hair restoration products

Wax

Hand sanitizers, sprays, foams, gels, soaps or wipes, including antibacterial items

Weight control preparations

Herbal teas, drinks, pills, or powder supplements

Wrinkle removing and concealing preparations

# 6.

If a homeopathic product is classified as a drug by the federal Food and Drug Administration, is used internally or topically, and is used for the cure, treatment, mitigation, or prevention of disease in human beings, the product is exempt from the retail sales and use tax.

# 7.

Nonprescription items packaged with items that would not qualify for exemption as nonprescription drugs, such as items found in a first-aid kit, are subject to the retail sales and use tax. The tax is computed on the total sales price.

# 8.

Items identified as "sensitive care products" range from lotions and soap-free cleaners to medicated products that treat a number of medical conditions. The taxability of these items must be determined on a case-by-case basis, based on the ingredients the item contains and the intended purpose of the product.

# 9.

Retailers making sales of nonprescription drugs must include exempt nonprescription drugs with all other exempt sales on the retailer's regular sales tax return, Form ST-9. Retail dealers making sales of such items must keep records segregating purchases and sales of exempt items.

# E.

Eyeglasses and other ophthalmic aids and supplies.

# 1.

Optometrists, ophthalmologists, and opticians are engaged in the provision of professional services and must pay the tax to their suppliers at the time they purchase instruments, supplies, equipment, and other tangible personal property used in performing their professional services or remit the use tax directly to the Department of Taxation on these items. However, when optometrists, ophthalmologists, and opticians provide eyeglass cases, contact lens storage containers, solutions, sterilization kits, or other similar devices related to wearing or maintaining contact lenses or eyeglasses to their patients free of charge, the practitioners may purchase these specified items exempt of the tax.

# 2.

Eyeglasses ground on prescription of physicians, ophthalmologists, or optometrists as well as frames that are an integral part of the glasses are exempt from the retail sales and use tax. Eyeglass frames sold in connection with the repair or replacement of prescription eyeglasses are also exempt from the tax, provided the prescription for the glasses is on file with the person replacing or repairing the eyeglass frames.

# 3.

Dealers, including ophthalmologists and optometrists, are not subject to the retail sales and use tax on purchases of eyeglass frames, optical merchandise, and optical supplies that are purchased for resale and may present the optical supplier with an exemption certificate, Form ST-10, at the time of purchase.

# 4.

Eyeglass frames, nonprescription sunglasses, cases, solutions for cleaning eyeglasses, barometers, telescopes, binoculars, opera glasses, and similar items are subject to the tax when sold to users or consumers. All persons making sales of these items, including opticians, optometrists, and ophthalmologists, are required to register as dealers and collect and pay the tax due.

# 5.

The exemptions outlined in this subsection have no application to the retail sales of eyeglasses or other optical goods not prescribed by licensed optometrists or ophthalmologists. All of these sales are subject to the tax.

# F.

Durable medical equipment, devices, and certain products for diabetics.

# 1.

Generally. The tax does not apply to wheelchairs and their repair parts, braces, crutches, prosthetic devices, orthopedic appliances, catheters, urinary accessories, other durable medical equipment and devices, insulin and insulin syringes, and equipment devices and chemical reagents that may be used by a diabetic to test or monitor blood or urine when these items are purchased by or on behalf of an individual for the individual's exclusive use. The fact that an item is purchased from a medical equipment supplier or on a physician's prescription is not dispositive of its exempt status.

In addition, parts or supplies that are specifically designed for use with the items outlined in this subdivision are exempt from retail sales and use tax. For example, because hearing aids qualify as durable medical equipment, hearing aid batteries also are exempt durable medical equipment because these items are a part or supply specifically designed for use with hearing aids. General purpose medical supplies such as tape, gauze, dressings, alcohol swabs, and sharps containers for disposal of used needles and waste bags are not designed for use with durable medical equipment; therefore, they do not qualify for the exemption.

# 2.

Prosthetic devices. Generally, implants satisfy the definition of prosthetic devices and may be purchased exempt of the tax when purchased by or on behalf of specific individuals. However, implants used for cosmetic purposes are not used to replace missing body parts or functions and, as such, do not qualify for exemption from the tax, regardless of whether they are purchased by or on behalf of an individual. For dentures and other prosthetic devices relating to the practice of dentistry, see 23VAC10-210-500.

# 3.

Following is a list of the types of items that are deemed durable medical equipment or other qualifying equipment or devices under this subsection. This is a listing of general categories of products; specific items must meet all of the requirements for durable medical equipment or other qualifying items, as outlined in subdivision 1 of this subsection. The listing is intended to be exemplary and not all inclusive.

Aerosol compressors, stationary and portable

Oxygen concentrators

Air oxygen mixers

Oxygen conserving devices

Alternating pressure pads

Oxygen cylinders

Alternating pressure pumps, if used with alternate pressure pads

Oxygen equipment

Apnea monitors and accessories

Oxygen fittings and accessories

Aspirators

Oxygen humidifiers

Bed rails

Oxygen tubing

Bedside commodes

Oxygen

Bone fracture therapy devices

Paraffin baths

Catheter devices and supplies

Patient care equipment for physical and occupational therapy

Colostomy supplies and devices

Patient lifts

Communication aids for physically impaired

Patient lift slings

Continuous passive motion devices

Patient transport devices and boards

Continuous positive airway pressure (CPAP) and CPAP accessories

Percussors and vibrators

Crawlers

Physical therapy items such as wrist and ankle weights, shoulder braces, supports and braces when rehabilitative related

Crutches, crutch pads, and tips

Phototherapy lights, provided they are used to serve a medical purpose and not for sun tanning purposes

Cylinder stands and support devices

Pneumatic compression units and accessories

Cylinder transport devices, sheaths and carts

Posture back supports, including back supports for seating

Decubitus seating pads and bed pads

Raised toilet seats

Dressing aids, button loops, zipper aids, etc.

Reaching aids

Eating and drinking aids

Regulators and flowmeters

Emergency oxygen delivery units

Respiratory accessories, such as PFLEX or Peak Flow items

Enteral and parenteral feeding equipment and supplies, including tubes, pumps, and containers

Respiratory therapy equipment

Face masks

Restraints

Fitted stroller

Room humidifiers with script

Foam seating pads

Shampoo trays

Foam wedges

Shower seating and bath benches

Gas oxygen refills and tanks

Shower grip bars

Geriatric chairs

Sitting and sleeping cushions

Glucose monitors and supplies, except batteries

Specialized seating, desks, and work stations

Grooming aids and dental aids

Specially designed hand utensils

Hand exercise equipment putty

Splints and holders

Heating pads

Stairglides and lifts in home

Hospital beds

Standing frames, devices, and accessories

Hospital bed mattresses and egg crates

Stethoscope

Household aids for the impaired

Tank wrench

Hydro-collators

Transcutaneous electrical nerve stimulator (TENS) unit and muscle stimulators

Hydro-therm heating pads

TENS accessories (electrodes, wiring specifically for use with TENS units)

Ice bags

Toilet safety frames

Intermittent positive pressure breathing (IPPB) circuits, devices and supplies

Tracheotomy and suction supplies

Intravenous (IV) stands

Traction stands, pulleys, etc.

IV supplies such as catheters and tubing

Trapeze bars and bar stands

Leg weights, related to rehabilitation

Ultrasonic nebulizers

Lift recliners

Vaporizer

Liquid and gas oxygen systems, stationary and portable

Volume ventilators, respirators, and related device supplies

Manual resuscitators

Walker accessories

Muscle stimulators

Walkers

Nasal cannulas

Walking canes, quad canes, accessories

Nebulizers and tubing

Wheelchairs

Overbed tables

Wheel walkers

Oximeters

Writing and speech aids for the impaired

# 4.

Following are examples that demonstrate whether the definition for durable medical equipment is met:

Example 1: A physician purchases a disposable capsule for a specific patient that must be ingested to capture internal images of the body. Because the capsule is disposable, it is not able to withstand repeated use. Therefore, the capsule does not qualify as durable medical equipment.

Example 2: A physician offering gynecological services purchases intrauterine copper contraceptive devices for a specific patient. Because the contraceptive devices are not useful in the absence of illness or injury, they are not durable medical equipment. Although there are instances of pregnancy that may threaten the health of a patient, and in which the patient may not be able to use other forms of contraceptive, the devices are designed for contraceptive use. Therefore, they are not exempt durable medical equipment.

# 5.

The exemption in this subsection is available only for items purchased by or on behalf of an individual for his use. In order to be deemed a purchase on behalf of an individual, the item must be specifically purchased for the individual. If items are purchased in bulk and then dispensed to individual patients, the exemption does not apply, even if the items are modified or fitted for a specific individual.

Example 1: A physician maintains an inventory of crutches or ace bandages that are dispensed to individual patients as needed. The physician must pay sales or use tax on these items because the original purchase was not made on behalf of a specific patient.

Example 2: A physician determines that a patient needs a brace and purchases a brace specifically designed for that patient. The purchase is made on behalf of the individual and is exempt from the tax.

The Department of Taxation has not prescribed a certificate of exemption to use when durable medical equipment and other exempt items under subdivision 1 of this subsection are purchased on behalf of a specific person. When the purchaser has no blanket exemption for its purchases and no certificate of exemption or other exemption notice from the Department of Taxation applies, the dealer must get a signed statement from the medical service provider making the purchase, such as the hospital, nursing home, licensed physician, or infusion service business, certifying that the durable medical equipment is purchased on behalf of a specific patient through a doctor's prescription or hospital's work order and is for sole use by that patient. The purchaser is also responsible for retaining a copy of the doctor's prescription or hospital work order as part of the record of the transaction for tax auditing purposes. The fact that a purchaser can trace durable medical equipment back to a specific patient after the fact is not sufficient to establish that the durable medical equipment was purchased for a specific individual; therefore, the purchaser's documentation must have included patient identification information at the time of purchase in order for the purchase to be deemed made on behalf of an individual. For purposes of proving that the sale was for a specific individual in the event of a sales and use tax audit, the purchaser may redact any identifying information in order to comply with federal and state privacy laws.

# G.

Hemodialysis and peritoneal dialysis equipment, supplies, and drugs. Hemodialysis and peritoneal dialysis equipment, supplies, and drugs used in dialysis are not subject to the tax. This exemption is applicable regardless of the nature of the purchaser. Therefore, hemodialysis and peritoneal dialysis equipment, supplies, and drugs may be purchased exempt by physicians, individuals, for-profit and nonprofit hospitals, and other entities.

# H.

Samples distributed to authorized recipients. Pharmaceutical manufacturers are not subject to sales and use tax for samples of prescription drugs and medicines or the packaging when distributed free of charge to licensed physicians, hospitals, pharmacies, and other health care facilities upon the written request of these medical providers in accordance with the federal Food, Drug, and Cosmetic Act (21 USC § 301 et seq.).

# I.

Purchases of medicines and drugs by veterinarians. Veterinarians who dispense medicines or drugs on prescription are deemed the users or consumers of all such medicines and drugs and must pay the retail sales and use tax on these purchases; however, veterinarians may purchase exempt of the sales and use tax all medicines and drugs that will be used in caring for, medicating, or treating agricultural production animals. For additional information on the taxability of drugs dispensed by veterinarians, see 23VAC10-210-6050.

# J.

Purchases of medical products and supplies by certain Medicaid recipients. Medicaid recipients are authorized to purchase medical products and supplies that are otherwise taxable, such as bandages, gauze dressings, incontinence products, and wound care products exempt from the retail sales and use tax, provided the purchase is made through a Department of Medical Assistance Services (DMAS) provider agreement. This exemption applies to any type of medical product or supply, incontinence, or wound care product, provided DMAS pays for the product or supply. Sellers must maintain sufficient documentation to verify that the purchase transaction meets the criteria of the exemption. The documentation must (i) identify the item sold; (ii) identify that the purchaser is a Medicaid recipient; and (iii) verify that the transaction is billed in accordance with a DMAS provider agreement.