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Small Animal Veterinarians

Under the new law, all charges made by veterinarians that come within the scope of professional services performed by veterinarians are subject to sales tax.

All of the itemized charges on the bill are subject to sales tax, effective July 1, 2018.

Retail pharmacies should charge sales tax on prescriptions fulfilled for animals under current law. The prescription drug exemption applies only to human beings.

s there a distinction between drugs prescribed for use by the client at home vs drugs prescribed for the patient in the hospital?

There is no difference for tax purposes.Are prescription diets or medications taxable?

Both are subject to tax.

No, any charges to the client for laboratory tests whether in-house or by reference lab are taxable. 

Does the new tax apply to outside lab tests? Charges a veterinarian practice pays for outside lab test are also subject to sales tax if the results are used in the veterinarian practice in Kentucky.

Cremation services do not fall within the scope of small animal veterinary services. Neither cremation charges to the veterinary practice nor cremation charges from the veterinary practice to the client are subject to tax. 

The veterinarian should keep clear client records that tie back to the billings for services rendered. These records should maintain the distinction between small animal and large animal treatments and charges. The new tax law specifically excludes services for equine, cattle, swine, sheep, goats, llamas, alpacas, ratite birds, buffalo, and cervids from taxable small animal veterinary services. In addition, DOR understands the term “small animal” veterinary services to generally refer to companion animals or pets. Mixed veterinary practices should keep clear records on exempt charges for services to livestock and equine vs. taxable services to pets.

all surgery related charges fall within the category of veterinarian services.

non-profit veterinarian practices will be liable for the sales tax on their gross receipts derived from the services rendered. These non-profits should bill their customers the tax and collect and remit it accordingly.

Are pet adoption fees charged by a 501(c)(3) nonprofit subject to sales tax?​Yes, the charges paid as a condition of ownership and/or possession of the pet are gross receipts from a sale, so they are subject to sales tax.