January 8, 2021

Sales-tax permits and nonprescription drugs

It’s happened to all of us: You wake in the middle of the night thinking, “I know prescription drugs are not subject to sales tax in most states (except Illinois for some reason), but do I still have to file sales-tax permits in each state for nonprescription drugs or supplements?”

Well, as it turns out, the folks at TaxJar have looked into this question and compiled a state-by-state list.

Here’s the tally: Nonprescription drugs are taxable in 37 states, specifically tax-exempt in 10 states, and four states don’t have a sales tax at all (D.C. included in the exempted states).

In addition to Illinois taxing prescriptions, TaxJar also mentions that, although Louisiana exempts tax on prescription drugs at the state level, local areas in that state can opt to tax them. TaxJar also provides an API to help pharmacists and others assign product tax codes to products sold.

Here are two resources worth checking out: