Drugs and devices used for family planning

Drugs and devices used for family planning, including preventing conception, are exempt from Washington sales and use tax in two situations: when they are dispensed to patients under a prescription, or when they are supplied by a family planning clinic under contract with the Washington Department of Health. A contracted clinic does not need a prescription for each item.

Who qualifies

• Practitioners, clinics and hospitals that dispense family planning drugs or devices to patients under a prescription.
• A family planning clinic under contract with the Department of Health to provide family planning services; for its supplies, no prescription is required.
• For human use only.

What qualifies

• Drugs and devices used for family planning purposes, including the prevention of conception (RCW 82.08.0281(2)-(3)).
• WAC: family planning purposes include promoting, inhibiting, preventing and determining conception, and the exemption includes all single-patient-use items, whether ingested, attached or applied.
• The matching use tax exemptions are RCW 82.12.0275(2)-(3).

Not covered

• Items neither dispensed under a prescription nor supplied by a Department of Health contracted clinic.
• Items for non-human use.

What the buyer gives

Form REV 27 0055, Sales Tax Exemption Certificate for Health Care Providers (revision 7/23/24), line 5, "Drugs and devices used for family planning purposes." The buyer ticks single use or blanket (valid while buyer and seller have at least one sale within 12 months), names the seller and the date, ticks the line for the exemption, and completes the signature block: type of entity, name of buyer, name of business, Account ID if any, signature, date, mailing address, title and phone. Only practitioners who can legally prescribe under Washington law may use the form; the form names chiropractors, East Asian medicine practitioners and massage practitioners as unable to use it.

What the seller keeps

Form REV 27 0055 says the seller or marketplace facilitator "must retain the original of this certificate for their records" and not send a copy to the Department of Revenue. WAC 458-20-18801(304): sellers to medical practitioners, nursing homes and hospitals must obtain an approved exemption form, capture the streamlined sales tax data elements, or otherwise meet RCW 82.08.050(7) for any exempt sale. WAC 458-20-18801(403)(g): sellers of these items to practitioners, clinics or hospitals must obtain a certificate, capture the data elements, or meet RCW 82.08.050(7). The rule also requires persons who dispense the items under a prescription to "obtain and maintain files of prescriptions" to document the exempt sales. RCW 82.32.070(1) requires taxpayers to "keep and preserve, for a period of five years, suitable records as may be necessary to determine the amount of any tax for which the taxpayer may be liable." Under RCW 82.08.050(4) a seller is not relieved of the tax unless it keeps proper records of exempt sales and provides them when the department asks; (7)(a) relieves a seller that obtains a fully completed certificate within 90 days after the sale, and (7)(b) allows 120 days after a department request to prove the sale was not taxable or obtain a fully completed certificate taken in good faith.

Common mistakes

• A clinic without a Department of Health contract supplying items without a prescription. Only contracted clinics are exempt without one.
• Not keeping prescription files. Dispensers must keep them to show the exemption.
• Using line 1 (general prescription drugs) when the purchase is for family planning. Line 5 is the family planning line.

Common questions

Is birth control exempt from sales tax in Washington?

Yes, when it is dispensed to a patient under a prescription, or supplied by a family planning clinic under contract with the Department of Health.

Does a Department of Health contracted clinic need prescriptions to buy exempt?

No. The statute has a separate exemption for drugs and devices supplied by a contracted family planning clinic. Other buyers need the items to be dispensed under a prescription.

Sources

• RCW 82.08.0281 (2), (3), (4)(a)
• RCW 82.12.0275 (2), (3)
• WAC 458-20-18801 (304); (403)(g)
• DOR form REV 27 0055 (7/23/24), Sales Tax Exemption Certificate for Health Care Providers Line 5; page 3 instructions, line 5
• RCW 82.08.050 (4), (7)(a)-(c) seller records and certificate timing
• RCW 82.32.070 (1) five-year record retention