Sales Tax Exemption

Over-the-counter medicines are a reliable and affordable way of maintaining wellness for millions of American families. OTC medicines not only treat the symptoms of common ailments but also help prevent a number of costly chronic conditions through products like smoking cessation programs.

The average American household spends approximately $442 on non-prescribed OTC medicines per year while the average senior citizen spends $356 yearly. Many states have already acknowledged the therapeutic value and cost-effectiveness of OTC medicines and allow a retail sales tax exemption for the purchase of these products. Connecticut, Maryland, Minnesota, New Jersey, New York, Pennsylvania, Texas, Vermont, Virginia, and the District of Columbia do not levy sales taxes on OTC medicines.

Our Position

Given that prescription medications filled at pharmacies are universally exempt from sales tax, over-the-counter drugs merit the same tax-free status. State and local authorities aiming to support public health should strongly consider aligning tax codes so these essential, everyday healthcare products remain affordable and accessible to all, especially vulnerable low-income populations.

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Polibrief

OTC Medical Devices

CHPA monitors legislation in all 50 states and Washington, D.C., and takes positions per the direction of the State & Local Government Affairs Committee. As the role of OTC Devices in self-care continues to grow, so too will our engagement on issues at all levels of American government.

Nov 20, 2024

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Polibrief

OTC Sales Tax Exemptions

OTC medical devices like bandages, menstrual products, face masks, and at-home test kits, used for the purposes of prevention, testing, and treatment are well-accepted, cost saving elements of the healthcare system. Unfortunately, most states that have a retail sales tax, include a tax on the sale of some or all OTC healthcare products. More than 40 states, on the other hand, exempt sales tax of prescription drugs.

Nov 19, 2024

Weekly Voice Teaser

Weekly Voice

State update: June 2, 2023

Jun 2, 2023

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Submission

Letter Regarding H.R. 1922

On behalf of the Health Choices Coalition, we write to applaud efforts to restore OTC medications to full tax-preferred status, eliminating the need to first obtain a prescription.

Oct 22, 2019

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Press Releases and Statements

Statement Regarding OTC Eligibility in FSA/HSA Accounts

CHPA applauds the House of Representatives’ passage of legislation that will restore consumers’ ability to use their HSAs and FSAs to purchase over-the-counter medicines and feminine hygiene products.

Jul 28, 2018

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Research Reports

Summary of State Sales Tax

State by state listing of whether OTC medicines are exempt from state sales tax or not.

Jun 1, 2018

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OTC Medications in the States
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Federal Legislative Priorities

Learn about CHPA's current slate of federal legislative priorities including OTC regulatory reform, dietary supplement regulation modernization, supply chain and product integrity, and more.

Retail Shopper
Sales Tax in the States

Given that prescription medications filled at pharmacies are universally exempt from sales tax, over-the-counter drugs merit the same tax-free status.

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