(a) Tangible personal property used or consumed by the veterinarian.

1. (1) Veterinarians are deemed to be the consumers or users of tangible personal property that is used or consumed by them in the nontaxable practice of veterinary medicine.

2. (2) Tangible personal property that is administered by a veterinarian, or by an assistant under the veterinarian's direction, during the treatment of an animal is:

   1. (A) Furnished as part of the nontaxable practice of veterinary medicine; and
   2. (B) Not taxed as a retail sale of tangible personal property.

3. (3)

   1. (A) The veterinarian must pay tax on its purchase of tangible personal property used or consumed in the nontaxable practice of veterinary medicine.
   2. (B) See 26 CAR § 33-103. Example 1: J.T. takes his puppy to the veterinarian for a rabies vaccination and checkup. J.T. is charged for the rabies vaccination and checkup, which are separately itemized on the invoice. Administering the vaccine is considered a nontaxable veterinary service. The vaccine is consumed in the rendition of veterinary services and the veterinarian is required to pay sales or use tax on the purchase of the vaccine. The veterinarian should not collect sales tax from J.T. Example 2: J.T. takes his dog to the veterinarian to be microchipped. J.T. is charged for the chip, implant procedure, and enrollment in a pet recovery service, which are separately itemized on the invoice. The microchip is consumed in the rendition of veterinary services and the veterinarian is required to pay sales or use tax on the purchase of the microchip. The veterinarian should not collect sales tax from J.T.

(b) Drugs requiring a prescription.

1. (1)

   1. (A) A veterinarian's sale of a drug that can only be legally dispensed by prescription is not taxable when sold by the veterinarian pursuant to a veterinarian-client-patient relationship.
   2. (B) A drug that can only be legally dispensed by prescription is furnished as part of the nontaxable practice of veterinary medicine.
   3. (C)

(i) The veterinarian must pay tax on its purchase of drugs that can only be legally dispensed by prescription.

1. (ii) See 26 CAR § 33-103. Example 1: J.T. takes his dog to the veterinarian to examine a skin condition. The veterinarian determines that the dog has a bacterial infection and prescribes a drug to be administered twice a day for a week. The drug can only be legally dispensed by prescription. J.T. is charged for the office visit and the drug, which are separately itemized on the invoice. The veterinarian should not collect sales tax from J.T. Example 2: J.T. takes his cat to the veterinarian. The veterinarian diagnoses the cat with a heart condition and prescribes a diuretic. The diuretic can only be legally dispensed by prescription. J.T. refills the prescription on a monthly basis at the veterinary clinic. The veterinarian should not collect sales tax from J.T. on the refill because the drug is sold by the veterinarian pursuant to a veterinarian-client-patient relationship.

2. (2)

   1. (A) However, the sale of a drug that can only be dispensed by prescription is taxable when a veterinarian sells a drug prescribed by another veterinarian or the drug is sold by a pharmacist.

   2. (B) The sale of the drug is a retail sale of tangible personal property because the drug is not sold by a veterinarian pursuant to a veterinarian-client-patient relationship. Example: J.T. takes his cat to the veterinarian. The veterinarian diagnoses the cat with a heart condition and prescribes a beta blocker. The drug can only be legally dispensed by prescription. J.T. must refill the prescription on a monthly basis. J.T. refills the prescription for the beta blocker at his local pharmacy. The pharmacy should collect tax from J.T. on the retail sale of the beta blocker.

      1. (c) Other tangible personal property.
3. (1) The retail sale of tangible personal property other than a drug that can only be legally dispensed by prescription is subject to sales tax.

4. (2) If the invoice does not separately state taxable and nontaxable items, then the total amount reflected on the invoice may be subject to tax. Example: J.T. takes his dog to the veterinarian to examine a skin condition. The veterinarian determines that the dog has a bacterial infection and prescribes a drug to be administered twice a day for a week. The drug can only be legally dispensed by prescription. During the checkout, J.T. also purchases three (3) months of flea and tick preventative that can be purchased without a prescription. J.T. is charged for the office visit, the drug, and the flea and tick preventative, which are separately itemized on the invoice. The veterinarian should collect sales tax from J.T. on the retail sale of the flea and tick preventative.

   1. (d) Grooming and boarding services.
5. (1) Pursuant to Arkansas Code § 26-52-316 pet grooming and kennel services are taxable.

6. (2)

   1. (A) A veterinarian that provides pet grooming or kennel services must collect sales tax from its customers.
   2. (B) See Arkansas Gross Receipts Tax Rule, 26 CAR § 30-.