Washington – Change to the Warehousing/Reselling Prescription Drug B&O Tax Preference

SALT Report 2998 – The Washington Department of Revenue issued an excise tax advisory regarding its intention to adopt ETA 3180.2013 – Warehousing/Reselling Prescription Drug B&O Tax Preference.  The ETA discusses the requirements for qualifying for the preferential tax treatment in RCW 82.04.272 and specifically addresses the requirements for sellers and buyers who engage “in the business of warehousing and reselling drugs for human use pursuant to a prescription.”

To qualify for the preferential B&O tax rate, the seller must meet all of the seller requirements, and the sale must be made to a buyer that meets at least one of the buyer requirements.

Seller Requirements

The seller is required to:

  • Purchase prescription drugs from a manufacturer or wholesaler,
  • Warehouse and resell the prescription drugs,
  • Be registered with the Federal Drug Enforcement Administration, and
  • Be licensed by the Pharmacy Quality Assurance Commission as either a wholesaler or a retailer

Buyer Requirements

The seller is required to resell the prescription drugs directly to a buyer who is:

  • A retailer with a pharmacy facility license, or non-residential pharmacy license, issued by the Department of Health under RCW 18.64.043 or RCW 18.64.370, or
  • A hospital, clinic, health care provider, or other provider of health care services

The notice states that the Department intends to file for ETA adoption on September 23, 2013.

For Further Information

Washington Department of Revenue – ETA 3180.2013