Present law requires businesses, vocations and occupations that are taxable to be designated into certain classifications for business tax rates. Each person must be classified according to the dominant business activity. Classification two includes prescription drugs and patent medicines. This bill exempts certain prescription drugs and patent medicines, as described below, from being included in classification two. Classification two taxpayers pay 3/20 of 1% of all sales by a retailer and 3/80 of 1% of all sales by a wholesaler. EXEMPTIONS Present law provides certain exemptions from business taxes. This bill exempts certain prescription drugs or medicines with a cost for a 30-day equivalent supply that exceeds the medicare part D specialty tier cost threshold for 2025 plan years, as determined by the federal centers for medicare and medicaid services. For the 2025 plan year, the medicare part D specialty tier cost threshold is set at $590. This bill exempts from business taxes prescription drugs and patent medicines that cost more than this threshold for a 30-day supply. This bill also exempts services necessary for proper preparation, storage, handling, administration, patient education, or post-sale monitoring of such exempt drugs and medicines.

Statutes affected:
Introduced: 67-4-708(2)(D), 67-4-708, 67-4-712