Personal protective equipment subject to Virginia sales tax again

Certain business purchases of personal protective equipment have been exempt from Virginia sales and use tax since March 11, 2021. The temporary exemption expires March 24, 2022.

A variety of personal protective equipment (PPE) that’s become familiar over the past two years was eligible for the exemption: body and face coverings, disinfectants, hand-washing facilities and hand sanitizer, physical barriers, signs, and temperature-checking devices. 

Since the exemption was provided to encourage Virginia businesses to adopt practices to slow the transmission of COVID-19, it was available only to businesses and self-employed individuals that:

  • Complied with best practices for infection prevention and workplace hygiene

  • Complied with all applicable federal, state, and local laws

  • Implemented enhanced cleaning, screening, testing, and contact tracing procedures, as well as any reasonable additional infection-control measures 

  • Promoted remote work to the fullest extent possible, including increasing the number of telework-eligible employees

  • Reasonably prevented the spread of COVID-19

The exemption could not be claimed for anything “other than business use.”

Per Virginia Department of Taxation Tax Bulletin 22-5, “Purchases that were eligible for the exemption and were purchased on or before March 23, 2022 continue to be exempt. However, any purchases made after March 23, 2022 are not eligible for the PPE exemption.”

The exemption for PPE was set to expire the first day following the expiration of the last executive order related to the COVID-19 pandemic, the termination of the COVID-19 Emergency Temporary Standard, and any permanent COVID-19 regulations adopted by the Virginia Safety and Health Codes Board. Since the statewide emergency order expired June 30, 2021, and the Safety and Health Codes Board COVID-19 Standard was repealed on March 23, 2022, the exemption expires effective March 24, 2022.

“This is an unusual example of the impact of a governor’s emergency declaration,” says Scott Peterson, Vice President of Government Relations at Avalara. “I am not aware of other examples of a tax exemption tied to a governor’s decision to end an emergency declaration.”

Do other states exempt PPE?

Cloth and disposable face masks are exempt from Pennsylvania sales and use tax. They were typically taxable prior to the COVID-19 pandemic, but according to the Pennsylvania Department of Revenue, they now qualify for the exemption for “everyday wear/clothing” because they’re “part of the normal attire.” 

California provides an exemption for PPE sold to or purchased by the state. Otherwise, PPE is generally subject to California sales and use tax.

Face masks and other PPE priced $2,500 or less qualify for the annual sales tax holiday in Massachusetts if purchased for personal use, and Texas exempts certain PPE during its August sales tax holiday. Florida did the same during its 2020 sales tax holiday and could do so again if it offers a sales tax holiday in 2022, though that seems unlikely as of this writing. 

Puerto Rico provided a temporary exemption for PPE in 2020, but it expired. And Michigan lawmakers approved an exemption for PPE in June 2021, but the governor vetoed it. 

Proposals to exempt PPE in Connecticut, Massachusetts, Minnesota, New Jersey, and New York all failed to make it into law. However, Georgia provides a tax credit for certain PPE manufacturers. And in March 2021, the Internal Revenue Service announced that the purchase of PPE for the purpose of preventing the spread of coronavirus is a deductible medical expense.

Keep your finger on the pulse of sales and use tax changes at the Avalara Tax Desk.

Cover photo by Canva

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