Keiter Tax Insight: New Tax Exemption for Virginia Veterinarians

Posted on March 23, 2022

The following is a tax insight article written by Terry Barrett, published on Keiter CPAs’ insights blog. View the full article here.

Veterinarians Receive Sales and Use Tax Exemption for Certain Purchases

Governor Youngkin has signed legislation passed by the General Assembly providing a sales and use tax exemption to certain purchases by veterinarians.  Specifically, the legislation creates a sales tax exemption for veterinarians on their purchases of prescription medicines and drugs that are administered or dispensed to patients within a veterinarian-client-patient relationship, as well as those that are resold to pet-owners regardless of the shelter. The exemption is effective July 1, 2022 through June 30, 2025.

Background of  Virginia Veterinary Tax Compliance

Historically Virginia has considered veterinarians, as providers of professional services, to be the taxable users and consumers of prescription medicines and drugs used in the treatment of animals, with the exception of animals used in agricultural production for market. Thus, veterinarians have had to pay the tax to their suppliers on prescription medicines and drugs they use in their veterinarian practices as well as those that are resold to patients/pet owners. Pet stores, pharmacies, and other sellers of pet medications, on the other hand, have been able to purchase prescription medicines and drugs for resale exempt of the tax.  The sale of prescriptions medicines and drugs, including prescription food, are exempt when sold to pet owners.

Keiter will continue to monitor action on the proposed regulations and provide updates to our clients and friends. If you have questions on this or other veterinary tax matters, please contact your Opportunity Advisor or Email | Call: 804.747.0000. We can advise you on strategic tax savings and planning opportunities that best fit your unique needs.

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Veterinarian Practice Insights: 2021 in Review

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