Texas – Sunscreen No Longer Taxable

SALT Report 1695 – Effective June 18, 2012, sunscreen is exempt from Texas sales and use tax due to a new Food and Drug Administration (FDA) rule. Prior to the FDA Ruling, Texas Tax Code Section 151.313 (a)(3) stated that an “over-the-counter item is exempt from sales tax only if the OTC drug or medicine is required by the FDA to be labeled with a drug facts panel.” As a result, sunscreen was deemed taxable because it was not required to be labeled with a drug facts panel.

However, on June 18, 2012 the FDA published a final rule that requires testing and a drug facts panel for all OTC sunscreen products. Therefore, because sunscreen is now required by the FDA to be labeled with a drug facts panel, it now qualifies for the exemption in Tax Code Section 151.313 (a)(3).

For Further Information:

Texas Comptroller – Taxability of Sunscreen Letter

FDA Rule