Publication 36, Veterinarians
Do You Make Retail Sales?
As a veterinarian, you commonly provide products including drugs, medicines, and pet supplies to your clients. This page is intended to help you determine if any of your sales are considered retail sales, and whether you need a seller’s permit. Information on reporting sales tax is found in the next section. Please refer to the Additional Information page for information and the complete list of regulations and publications referenced in this publication.
Are you a retailer, consumer, or both?
Retailer. If you make sales in your practice that qualify you as a retailer under the Sales and Use Tax Law, you must obtain a seller’s permit, file tax returns, and pay tax on those sales. Using resale certificates, you may buy products to resell. Your suppliers will not apply sales tax to purchases you make with a resale certificate.
Consumer. If you are considered a consumer (end user) for all of your transactions, you are generally not required to obtain a seller’s permit or report sales tax to us. Your suppliers will generally apply tax when you purchase products that you will consume in your practice. Under certain circumstances, you may be liable for reporting use tax to us (see Required registration to report use tax—How to register and file a return and Taxability of Purchases).
Most veterinarians are both. You may be considered a retailer in some instances and a consumer in others. If this is the case, you will need to obtain a seller’s permit and report tax to us on your retail sales. While you may use a resale certificate to purchase items you will resell, your suppliers should apply tax when you purchase items you will consume in your practice.
Required registration to report use tax—How to register and file a return
A “qualified purchaser” must register with us and annually report and pay use tax directly to us, as required by Revenue and Taxation Code section 6225. If you are not required to hold a seller’s permit and are not currently registered with us for use tax purposes, you may be required to register as a “qualified purchaser.”
Prior to January 1, 2024, a “qualified purchaser” was defined as a person that received at least $100,000 in gross receipts from their business operations per calendar year and was not otherwise required to be registered with us. Gross receipts are the total of all receipts from both in-state and out-of-state business operations.
Beginning January 1, 2024, the definition of a “qualified purchaser” was revised to eliminate the requirement that the person receives at least $100,000 in gross receipts per calendar year from business operations. It instead requires that the person makes more than $10,000 in purchases subject to use tax (excluding vehicles, vessels, or aircraft) per calendar year if the use tax imposed on those purchases has not otherwise been paid to a retailer engaged in business in this state or authorized to collect the tax. This change is effective from January 1, 2024, through December 31, 2028.
On January 1, 2029, that definition of a “qualified purchaser” will revert to the person receiving at least $100,000 in gross receipts per calendar year from business operations.
You can register from the CDTFA homepage by selecting Register Online and then selecting Register a New Business Activity. Once you are registered, you may pay any use tax due after filing your return. You can also register in person at any of our local offices to pay use tax.
For additional information see publication 126, Mandatory Use Tax Registration for Service Enterprises.
Notes
Which sales are retail sales?
To determine which of your sales are retail sales, we consider:
- The type of service, if any, provided with the product;
- Whether the product is a drug or medicine, or another type of product; and
- For products other than drugs or medicines, your billing method.
The table below shows the circumstances in which you are considered to be a retailer, and when you are a consumer. It is important that you refer to the following sections for definitions of the terms found in the table.
Retail sales and products used by veterinarians
| Item | Furnished without professional services | Furnished with professional services | |
|---|---|---|---|
| Separate charge | Charge not separate | ||
| Drugs and medicines | retailer | consumer | consumer |
| Other products | retailer | retailer | consumer |
Professional services
Charges for your services are not subject to sales tax.
In defining retail sales by veterinarians, we look at the relationship between the products you sell and the services you provide. As you can see on the preceding table, providing a product to a customer without professional services is generally considered a taxable retail sale. Yet, when the same product is provided with professional services, you may be considered the consumer of the product. Therefore, it is important that you understand how we define professional services.
Professional services
Professional services are considered to include activities such as:
- Diagnosis, including examinations, X-rays, tests, and so forth
- Treatment
- Surgery
- Administration of drugs
Example: A product furnished with professional services. Based on your examination of a parrot and subsequent tests, you determine that the bird has a respiratory infection. You provide your client with a liquid antibiotic for the parrot, an action directly related to specific professional services—in this case, your examination, tests, and diagnosis. As you can see in the table above, when you provide a drug or medicine with professional services, you are considered the consumer of the drug, and the transaction is not a retail sale (see Drugs and medicines, below).
Other services
Some services you provide are not considered to be professional services. Although you may, in connection with the sale of a product to a customer, use your:
- General medical knowledge and experience to recommend the use of a particular drug or other product, or
- Provide advice to a customer regarding the use of a particular product.
These actions are not considered professional services.
Example: A customer comes into your office seeking an ointment for a minor cut on her horse. Advice you provide regarding which ointment to buy, or how to use it, is not considered a professional service. The sale of the ointment is a retail sale (see Retail sales and products used by veterinarians above).
Drugs and medicines
You are generally considered the consumer of drugs and medicines (see definition below) you furnish with related professional services. However, when you do not provide related professional services, furnishing drugs or medicines to clients is considered a retail sale, and you are generally required to report sales tax based on the product’s selling price.
Exemptions
If a drug or medicine will be administered to food animals (see Feed for food animals) or to animals that will be sold by their owners in the regular course of business, the sale, use, or purchase of the drug or medicine may not be taxable. This is true whether you are considered the retailer or consumer of the product. For more information and a table showing when tax applies to transactions involving drugs and medicines (see Tax-exempt sales of drugs and medicines).
Definition
Veterinary drugs and medicines are considered to be substances or preparations intended for the use in the diagnosis, cure, mitigation, treatment, or prevention of disease in animals. They include:
- Pills (other than vitamins)
- Capsules (other than vitamins)
- Liquid medications
- Injectable drugs
- Ointments
- Vaccines
- Intravenous fluids
- Medicated soaps (available only to veterinarians)
Please note: Supplies you use in your practice, such as dressings, sutures, splints, and so forth, are not considered drugs or medicines. You are generally considered the consumer of those supplies.
Other products
As shown in the table on Retail sales and products used by veterinarians, sales of products other than drugs or medicines, when furnished without related professional services, are generally considered retail sales. When these products are provided with professional services, your billing method determines whether the transaction is considered a retail sale (see below).
The following products are not considered veterinary drugs or medicines:
- Flea powder, spray, and dip
- Flea collars
- Leashes, leads, and collars
- Animal carrying cases
- Animal shampoo
- Grooming aids
- Pet foods, including prescription diet foods and artificial diets
- Vitamins
Billing methods and tax
You are considered the retailer of products other than veterinary drugs or medicines furnished with professional services when you list a separate charge for those items on your bill. Tax is due on the sale of the products based on their selling price. However, if you bill your client for a lump sum amount (services and products combined in one charge), you are considered the consumer of those products rather than the retailer.
X-rays
You are considered the retailer of X-rays if you:
- Deliver X-rays to a client (for example, you hand them to your client), and
- Charge separately for them.
Tax would apply to your charges.
Boarding charges
You may board animals at your hospital or clinic in association with professional services or as a service to your clients. Your charges for boarding are not subject to tax, whether they are itemized or included in a lump-sum billing. However, you may be required to report tax on the sale of products furnished for a boarded animal.
- If your bill does not list separate charges for products furnished, you are considered the consumer of those products and should not buy them with a resale certificate. If you do, you will owe use tax based on their purchase price (see Use tax).
- If your bill includes separately stated charges for products furnished, you are considered the retailer of those products and must report tax on your sales. Exception: If you provide professional services with boarding, you are generally considered the consumer of drugs and medicines even when you charge separately for them (see Drugs and medicines).
Questions?
If you’re not sure whether to report tax on a sale, please call our Customer Service Center at 1-800-400-7115 (TTY:711).
Revision July 2026