Idaho Sales Tax Exemption for Wound Care Products
AGILE CONSULTING GROUP
Idaho provides a sales and use tax exemption for certain wound care products purchased by healthcare facilities when these items qualify either as prescription drugs or prosthetic devices. Idaho Code Ann. § 63-3622N(a)(1) exempts drugs purchased under a prescription or work order of a practitioner, while Idaho Code Ann. § 63-3622N(a)(5) exempts prosthetic devices — defined in Idaho Code Ann. § 63-3622N(e) as devices that replace a missing part or function of the human body — when purchased under a prescription or work order. Medicated wound care dressings infused with antimicrobial agents, analgesics, or growth factors qualify as prescription drugs because they are intended for the treatment of disease and labeled "Rx Only." Wound closure products and non-medicated wound care items qualify as prosthetic devices because they replace the skin's protective barrier and structural functions lost due to injury or surgical incision.
Agile Consulting Group's Recent Guidance from the Idaho State Tax Commission
Medicated Wound Care Dressings Qualifying as Prescription Drugs
- Antimicrobial silver dressings
- Antimicrobial honey dressings
- PHMB-impregnated dressings
- Analgesic dressings
- Enzymatic debriding agents
- Growth factor dressings and gels
- Charcoal dressings
- Collagen-based dressings
- Skin substitutes
Wound Closure Products Qualifying as Prosthetic Devices
Qualifying wound closure products include:
- Sutures
- Skin staples
- Zip 16 Surgical Skin Closure Device
- Skin closure strips
Non-Medicated Wound Care Products Qualifying as Prosthetic Devices
- Wound dressings
- Bandages
- Gauze
How to Claim the Exemption
Healthcare facilities purchasing qualifying wound care products in Idaho should provide their suppliers with a completed Idaho Sales Tax Resale or Exemption Certificate ( Form ST-101 ). The certificate should indicate that the products are being purchased for administration or distribution by a practitioner under a prescription or work order. Facilities should retain documentation demonstrating that the products meet the statutory definitions of "drug" or "prosthetic device", including product labeling showing "Rx Only" designations, product inserts describing therapeutic uses, and references to national databases (such as the National Library of Medicine's GUDID) confirming prescription requirements.
How to Recover Idaho Taxes Previously Paid to Vendors
Healthcare facilities that paid Idaho sales or use tax on qualifying wound care products may file a refund claim using Idaho State Tax Commission Form TCR (Sales Tax Refund Claim) to recover these overpaid taxes. Idaho allows refunds for purchases made within three years from the date the tax was paid to the state.
Facilities must provide detailed documentation with their refund claim, including:
- A detailed exemption worksheet identifying each qualifying product, the tax paid, and the applicable exemption statute
- Copies of invoices showing the sales tax paid
- Product documentation (labeling, inserts, GUDID references) demonstrating the items qualify as prescription drugs or prosthetic devices
- Evidence that the products were administered or distributed by practitioners under prescription or work order (e.g., facility protocols, sample prescription records)
The consultants at Agile Consulting Group have experience in recovering overpaid sales taxes from the Idaho State Tax Commission and can assist any Idaho healthcare provider with this cumbersome process.
Reach Out to Us with Questions
If you have any questions, comments or would like to discuss the specific circumstances you are encountering in regard to this issue or need assistance with a sales tax refund review or any other sales and use tax issue, please contact a member of Agile Consulting Group's sales tax consulting team at (888) 350-4TAX (4829) or via email at info@salesandusetax.com.
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