Sales Tax Articles
Sales Tax State Activity Update - February 2007
Vermont Smoking Cessation Added Bonus: No Sales Tax
The Commissioner of Taxes has issued a Formal Ruling to discuss the taxability of over-the-counter nicotine replacement products, such as patches, gums and lozenges. Such products aid in tobacco cessation by releasing small, steady doses of nicotine into the body to relieve the symptoms and discomfort often associated with nicotine withdrawal.
32 V.S.A. § 9741(2), in part, provides and exemption for drugs intended for human use in treatment intended to alleviate human suffering or to correct human physical disabilities. 32 V.S.A. § 9701(29) defines drugs, in part, to be used in the diagnosis, cure, mitigation, treatment, or prevention of disease. As there are confirmed links between smoking and disease, and because the products alleviate withdrawal symptoms, nicotine replacement products which aid smokers in their efforts to quit smoking are deemed to qualify as drugs. Thus, they are exempt from sales and use tax.
The full text may be accessed on the official Vermont Government website.
(Vermont Department of Taxes, Formal Ruling 2006-01, 7/31/2006)
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