Virginia – Taxability of Purchases of Agricultural Products by Veterinarians

SALT Report 1947 – The Virginia Tax Commissioner issued a ruling on the application of sales and use tax to agricultural products sold to veterinarians.  The Taxpayer is a distributor of health products, feed and supplies for equine, livestock and domestic animals.  It is the Taxpayer’s understanding that veterinarians are only allowed an exemption for medicines and drugs that are used directly in the care, medication, and treatment of agricultural production animals or for resale to a farmer for direct use in producing an agricultural product for market.

The Taxpayer requested guidance regarding the taxability of the products it sells to veterinarians and confirmation from the Department that it is in compliance with Virginia law regarding the taxability of these products.

Title 23 VAC 10-210-50 provides that:  “tax does not apply to commercial feeds, seed, plants, fertilizers, liming materials, breeding and other livestock, semen, breeding fees, baby chicks, turkey poults, agricultural chemicals, fuel for drying or curing crops, baler twine, containers for fruits or vegetables, farm machinery and agricultural supplies sold to farmers for use in agricultural production for market.”

Based on the above statute, the Commissioner determined that the Taxpayer’s sales of agricultural products to veterinarians are subject to sales and use tax because veterinarians provide professional services and are not involved in agricultural production.   Specifically, agriculture involves the cultivation of soil, the production of crops, and the raising of livestock therefore, veterinarians are not engaged in agricultural production for market.

For Further Information:

Virginia Department of Taxation – Ruling of Commissioner P.D. 12-187