Sponsored by:
Senator JON M. BRAMNICK
District 21 (Middlesex, Morris, Somerset and Union)
SYNOPSIS
Exempts sales of bandages and other similar products from sales and use tax.
CURRENT VERSION OF TEXT
As introduced.
An Act exempting sales of bandages from the sales and use tax and amending P.L.1980, c.105.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 13 of P.L.1980, c.105 (C.54:32B-8.1) is amended to read as follows:
13. a. Receipts from sales of the following sold for human use are exempt from the tax imposed under the "Sales and Use Tax Act":
(1) drugs sold pursuant to a doctor's prescription;
(2) over-the-counter drugs;
(3) diabetic supplies;
(4) prosthetic devices;
(5) tampons or like products;
(6) medical oxygen;
(7) human blood and its derivatives;
(8) durable medical equipment for home use;
(9) mobility enhancing equipment sold by prescription; [and]
(10) repair and replacement parts for any of the foregoing exempt devices and equipment; and
(11) adhesives, bandages, dressings, gauze, and swabs, whether or not these items contain an antiseptic or bacterial control product in the pad, that are disposable and not designed for repeated use.
b. As used in this section:
"Drug" means a compound, substance, or preparation, and any component of a compound, substance, or preparation, other than food and food ingredients, dietary supplements, or alcoholic beverages:
(1) recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them; or
(2) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or
(3) intended to affect the structure or any function of the body.
"Over-the-counter-drug" means a drug that contains a label which identifies the product as a drug, required by 21 CFR 201.66. The label includes:
(1) a "Drug Facts" panel or
(2) a statement of the "active ingredient" or "active ingredients" with a list of those ingredients contained in the compound, substance or preparation. "Over-the-counter drug" does not include a grooming and hygiene product.
"Grooming and hygiene
product" is soap or cleaning solution,
shampoo, toothpaste, mouthwash, anti-perspirant, or sun tan lotion or screen, regardless of whether the item meets the definition of "over-the-counter drug."
"Prescription" means an order, formula, or recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of this State.
"Prosthetic device" means a replacement, corrective, or supportive device including repair and replacement parts for same worn on or in the body in order to:
(1) artificially replace a missing portion of the body; or
(2) prevent or correct a physical disability; or
(3) support a weak or disabled portion of the body.
"Durable medical equipment" means equipment, including repair and replacement parts, but not including mobility enhancing equipment, that:
(1) can withstand repeated use;
(2) is primarily and customarily used to serve a medical purpose;
(3) is generally not useful to a person in the absence of illness or injury; and
(4) is not worn in or on the body.
"Mobility enhancing equipment" means equipment, including repair and replacement parts, other than durable medical equipment, that:
(1) is primarily and customarily used to provide or increase the ability to move from one place to another and which is appropriate for use either at home or in a motor vehicle; and
(2) is not generally used by persons with typical mobility; and
(3) does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.
c. Receipts from sales of supplies purchased for use in providing medical services for compensation, but not transferred to the purchaser of the service in conjunction with the performance of the service, shall be considered taxable receipts from retail sales notwithstanding the exemption from the tax imposed under the "Sales and Use Tax Act" provided under this section.
(cf: P.L.2017, c.131, s.214)
2. This act shall take effect immediately and apply to receipts received from all sales made on or after the first day of the fourth month next following the date of enactment.
STATEMENT
This bill provides an exemption from the sales and use tax for sales of adhesives, bandages, dressings, gauze, and swabs, whether or not these items contain an antiseptic or bacterial control product in the pad. To qualify for the exemption, the product must be disposable and not designed for repeated use.
Under current law, a bandage may be exempt from the sales and use tax if it meets the definition of an over-the-counter drug. An over-the-counter-drug must contain a label that includes a "Drug Facts" panel or a list of active ingredients. If a bandage has an active ingredient it is exempt from the sales tax; if a bandage does not have an active ingredient it is a taxable product. This bill is intended to extend the sales tax exemption to all of these commonly used medical supplies, whether or not they are over-the-counter drugs.
This bill takes effect immediately, but provides for the exemption to apply to receipts from all sales made on or after the first day of the fourth month next following enactment.