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Virginia: IUDs Are Exempt

  • Sep 24, 2013 | Gail Cole

 Virginia: IUDs sold to individuals working in the medical field are exempt from sales and use tax.

Do intrauterine copper contraceptive devices (IUD) meet the criteria for durable medial equipment and qualify for an exemption from sales and use tax in Virginia? According to a recent ruling by the Virginia Tax Commissioner, they do.

This issue arose when a manufacturer of IUDs questioned a previous determination by the Virginia Tax Commissioner (Public Document 01-180, 10/31/01), which stated that IUDs are not classified as medical devices for sales tax purposes.

In the 2001 case, the "issue of whether or not the devices were classified as prescription drugs was not raised by the taxpayer and, therefore, not addressed …." Yet this is the crux of the matter brought before the Tax Commissioner earlier this year.

According to the Federal Drug Administration, "Intrauterine devices for human use for the purpose of contraception that incorporate heavy metals, drugs, or other active substances" have been accorded drug status. (Section 310.502)

Under Virginia law, sales and use tax does not apply to:

"Medicines [and] drugs . . . dispensed by or sold on prescriptions or work orders of licensed physicians . . . controlled drugs purchased for use by a licensed physician, dentist, optometrist, licensed nurse practitioner, or licensed physician assistant in his professional practice, regardless of whether such practice is organized as a sole proprietorship, partnership, or professional corporation, or any other type of corporation in which the shareholders and operators are all licensed physicians, optometrists, licensed nurse practitioners, or licensed physician assistants engaged in the practice of medicine, optometry, or nursing; medicines and drugs purchased for use or consumption by a licensed hospital, nursing home, clinic, or similar corporation not otherwise exempt under this section . . . . " (Virginia Code § 58.1-609.10 9).

The Virginia Department of Taxation "considers the FDA guidelines in the classification of products" for exemption purposes. Therefore, the Tax Commissioner ruled that the taxpayer who raised this issue "may sell IUDs exempt of the tax to a licensed physician, licensed nurse practitioner, or licensed physician assistant for use in his or her professional practice." Read the full ruling here.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.