Publication 27, Drugstores

This publication outlines how California’s sales and use tax laws apply to drugstores, focusing on what items are taxable versus nontaxable in relation to medicines, medical devices, food products, and general merchandise. It explains the distinctions between prescription medicines, over‑the‑counter products, and medical supplies, as well as how exemptions are determined. The guide is intended to help drugstore operators correctly apply tax rules and maintain compliance with state regulations.

More specifically, the publication details tax treatment for items such as prosthetic and orthotic devices, diabetic testing supplies, breast pumps, beverages subject to CRV, and includes rules for coupons, rebates, and CalFresh transactions. It also covers how tax applies to business purchases related to use tax obligations, resale certificates, packaging materials, and out‑of‑state acquisitions. Additional sections provide guidance on reporting, bad debt deductions, recordkeeping, and resources for obtaining written tax advice from California Department of Tax and Fee Administration (CDTFA).

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Please note: This publication summarizes the law and applicable regulations in effect when the publication was written. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the information in this publication and the law or regulations, decisions will be based on the law or regulations and not on this publication.

The sale of tobacco products to persons under 21 years of age is prohibited by law and subject to penalties. To report an unlawful tobacco sale, call: 1-800-5-ASK-4-ID.

Revision October 2026