The place to find business sales tax information

— as well as solutions, services and jobs!

Which States Tax Prescription and Over-The-Counter Medicine?

author photo of James R. Dumler

The legal definition of a medicine varies slightly from state-to-state, but it generally includes any pill, powder or substance that is intended to treat, cure or mitigate human disease or ailments and has medicinal qualities. For the purposes of this blog post, the definition does not include medical devices, prostheses, supplies (including bandages), personal hygiene products or medicinal marijuana, all of which will be addressed in subsequent postings. Finally, a prescription medicine is one that is ordered by a licensed member of the medical profession, and an over-the-counter (OTC) medicine is any medicine, as defined above, that may be purchased without a prescription.

States which currently tax prescription medicine:

There are only two (2) states which currently tax prescription medicine: Illinois and Georgia.

  • Illinois - currently subjects prescription medicine to a reduced rate of tax.
  • Georgia - exempts prescription medicine from tax but OTC medicine such as aspirin, acetaminophen, ibuprofen, cold remedies, antacids, laxatives, and cold sore gels are subject to tax, even if purchased under a prescription.

In every other state, prescription medicines are exempt from tax.

States in which OTC medicine is currently tax-exempt:

OTC medicine is generally tax-exempt in the following eight (8) states/jurisdictions:

  • District of Columbia (as of 4/1/2015), Maryland, Minnesota, New Jersey, New York, Pennsylvania, Vermont and Virginia.

The following states have enacted qualified exemptions for OTC medicines:

  • Connecticut - as of 4/1/2015, certain OTC medicines are exempt from tax including: vitamin or mineral concentrates; dietary supplements; natural or herbal drugs or medicines; products intended to be taken for coughs, colds, asthma or allergies, or antihistamines; laxatives; antidiarrheal medicines; analgesics; antibiotic, antibacterial, antiviral and antifungal medicines; antiseptics; astringents; anesthetics; steroidal medicines; anthelmintics; emetics and antiemetics; antacids; and any medication prepared to be used in the eyes, ears, or nose. Specifically excluded from the exemption are cosmetics and personal hygiene items like deodorant and mouthwash.
  • South Carolina - OTC medicines are exempt from tax when they are sold to a health care clinic that provides medical care without charge to its patients.
  • Texas - OTC medicine is exempt if it is required to be labeled with a "Drug Facts" panel by the federal Food and Drug Administration.
  • Missouri - OTC medicine is exempt from tax when purchased by an individual with a disability or by the individual's agent.

States which currently tax OTC medicine:

The following thirty-three (33) states currently tax OTC medicine:

  • Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois (subject to a low rate of tax), Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Washington, West Virginia, Wisconsin and Wyoming.

This is my first post to this blog, so I would really appreciate any feedback you would be willing to provide. My goal is to make this blog informative and interesting for companies in this industry - that's to say as interesting as multistate sales and use tax can be.

NOTE: The COMMENTS feature is no longer available for this post. If you are a CONSUMER with questions about tax on prescriptions, please contact your state’s Department of Revenue (or equivalent) for assistance.

About the Author: James R. Dumler is a Certified Public Accountant (CPA) and an Equity Partner at McClellan Davis LLC, a professional firm specializing in a full spectrum of multistate sales and use tax services. James’ primary focus is multi-state sales and use tax audit, compliance and appeals matters, as well as cigarette & tobacco tax and sales and use tax return preparation. In addition, James has assisted numerous medical distributors and health facilities with compliance, refund and audit related matters in jurisdictions nation-wide.

Contact the Author: James can be easily reached using the "Request a Consultation" link on his associated FIRM PROFILE page. Post-related comments or questions are also welcome and may be submitted by using the on-page "Comment" feature, subject to disclaimer at bottom of page.

Other recent “Medical Industry Tax” posts by James R. Dumler:

NOTE: All blog content, comments, and participation subject to disclaimer at bottom of page.



Access to any portion of is contingent upon your acceptance of our Terms of Use. This Web Site and content provided by STS Publishing, LLC and its third party content providers, including, but not limited to information, documents, forms, comments, advice and opinions, is for informational purposes only, and is not a substitute for professional advice, nor does the use of this Web Site constitute a professional-client relationship. The Web-Site also includes advertisements, directory listings, job postings and links to third party web sites, all of which are provided for your convenience only and in no way constitute a referral, endorsement, or warranty by of any product or service provided by such third parties. All content is provided “as is” with no guarantee regarding accuracy, suitability, or timeliness. Your reliance on any content accessed on or through the Web Site, or on any product or service provider is strictly at your own risk.