Search Category: Exemptions
Definitions for Medical Products Exemption
Practitioner
- Audiologist
- Chiropractor
- Dentist
- Denturist
- Nurse practitioner
- Ophthalmologist
- Optometrist
- Orthodontist
- Physician
- Physician assistant
- Podiatrist
- Psychologist
- Surgeon
OR any person licensed under Title 54 Idaho Code to prescribe, administer or distribute the medical products listed in this guide.
Drug
To be defined as a drug, and article must meet at least one of these conditions:
- An article recognized as a drug in an official drug reference or its supplement
- An article intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in humans
- An article, other than food, used to affect the structure or any function of the human body
- An article intended for use as a component of any of the three articles above
…and at least one of these conditions:
- Is listed in a drug reference that the Idaho State Board of Pharmacy requires Idaho licensed pharmacies to maintain
- U.S. federal or Idaho law requires that its use be by prescription only
Drugs for animals
The exemption doesn’t cover drugs used in the treatment, diagnosis, cure, mitigation or prevention of disease in nonhumans. This includes drugs a veterinarian administers to both farm animals and pets.
Note: Drugs a farmer or rancher administers to farm animals can qualify for the production exemption. (See Farming and Ranching: Production Exemption.)
Durable medical equipment (DME)
- Can withstand repeated use
- Is primarily and typically used for a medical reason
- Isn’t generally useful to a person who doesn’t have an illness or injury
- Can be used in the home
Examples:
- Hospital beds
- Oxygen equipment
- Nebulizers
- Wheelchairs
- Other aids for the impaired
Note: Prescribed items (such as hot tubs) that are useful to people who aren’t ill or injured aren’t exempt.
Prosthetic devices
- Replace a missing part or function of the human body
- Include supplies physically connected to the device
Examples:
- Artificial limbs
- Heart valves
- Voice boxes
Orthopedic appliances
These are products that correct or relieve the impact of defects, diseases or injuries to bones or joints.
Examples:
- Arch supports
- Crutches
- Braces
- External supports
Example: A licensed doctor’s prescription for a health club membership to a patient who needs physical conditioning is taxable because it’s not a listed item.
Giving Away Free Medical Products and Prescriptions
Companies often give free medical products or drugs to practitioners, entities or individuals. This donor company giving the items away is the user of the items. As the user, the donor company owes tax on the items. The recipient does not owe use tax on the items received.
Giver’s responsibility:
You must pay Idaho use tax on the value of medical products or drugs you give away if you didn’t pay tax on the items when you bought them. Retailers or wholesalers giving away items owe use tax on the price they paid. Manufacturers owe use tax on the fabricated value.
Laws and Rules for Medical Products and Prescriptions
Learn more about medical products and prescriptions:
- Prescriptions (Idaho Code section 63-3622N; Sales Tax Rule 100)
- Certificates for Resale and Other Exemption Claims (Sales Tax Rule 128)
- Definitions (Idaho Code section 54-1705; Sales Tax Rule 010)
- Imposition and Rate of the Use Tax – Exemptions (Idaho Code section 63-3621; Sales Tax Rule 072)
- Storage – Use (Idaho Code section 63-3615)
- Idaho Code Title 54 Professions, Vocations, and Businesses
General
All retail sales in Idaho are taxable unless specifically exempted by Idaho or federal law. A sale is exempt from sales and use tax only if Idaho law specifically allows an exemption. For example:
- The buyer is:
- An organization that can buy all goods and services exempt from sales and use tax
- An organization or person that can buy certain goods or services exempt from sales and use tax
- The goods or services:
- Will be used in a certain way, so they may be exempt from either sales tax, use tax, or both
- Are exempt from sales and use tax for all buyers
- Are for resale, so they’re exempt from sales and use tax
Restrictions can apply to any tax-exempt sale or use. In all cases, the buyer and seller must keep clear and complete records to explain why tax wasn’t charged or paid. Usually, the buyer must complete an exemption certificate.
If the sale is taxable and the buyer doesn’t pay tax to the seller, the buyer owes use tax. The amount of use tax due is the same amount as if the seller had charged Idaho sales tax.
This guide will cover:
- Buyers that aren’t charged tax
- Goods and services that are or can be exempt because:
- They’re exempt from sales tax for all buyers
- The buyer will use them in an exempt way, or
- The buyer will resell them
Documentation
- The buyer must give the seller a completed
Form ST-101 – Sales Tax Resale or Exemption Certificate (Read more about exemption certificates.) - The exempt buyer should check the box(es) that apply. Read the Form ST-101 instructions. In some cases, sellers must keep a copy of the documents the buyer provides.
- Where noted, alternate documents are acceptable or required.
- The seller should keep the certificate and any other documentation and not charge tax on future qualifying sales to the buyer.
- The exemption certificate must be completed, signed, and dated.
- Buyers that are never taxed don’t have to pay use tax.
We may bill sellers or buyers for the tax due if they don’t keep records to explain why sales weren’t taxed.
Medical Products
This guide explains Idaho sales and use tax laws for buying and selling medical supplies and prescriptions.