Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart C - CERTAIN STATUTORY EXEMPTIONS › Section 130.311 - Drugs, Medicines, Medical Appliances, and Grooming and Hygiene Products

Current through Register Vol. 48, No. 28, July 12, 2024
a) General.
With respect to prescription and nonprescription medicines, drugs,
				medical appliances, products classified as Class III medical devices by the
				United States Food and Drug Administration that are used for cancer treatment
				pursuant to a prescription, as well as any accessories and components related
				to those devices, modifications to a motor vehicle for the purpose of rendering
				it usable by a person with a disability, and insulin, blood sugar testing
				materials, syringes, and needles used by human diabetics, the tax is imposed at
				the rate of 1%. Beginning January 1, 2014, "prescription and nonprescription
				medicines and drugs" includes medical cannabis
and medical cannabis
				infused products
purchased from a registered dispensing organization
				under the Compassionate Use of Medical Cannabis Program Act
[410 ILCS
				130]. [35 ILCS 120/2-10] Medical
				cannabis, including medical cannabis infused products, sold by registered
				dispensing organization under the Compassionate Use of Medical Cannabis Program
				Act, is subject to Retailers' Occupation Tax at the 1% rate, plus applicable
				local taxes. Cannabis paraphernalia is subject to Retailers' Occupation Tax at
				the general merchandise rate of
				6.25 %. Grooming and hygiene
				products do not qualify for the 1% rate, regardless of whether the products
				make medicinal claims. Grooming and hygiene products are taxed at the general
				merchandise rate of 6.25%. [See
				35 ILCS
				120/2-10]
AGENCY NOTE: Medical cannabis is subject to tax under both
				  the Metro East Mass Transit District Retailers' Occupation Tax (as provided in
				  70 ILCS
				  3610/5.01) and the Regional Transportation Authority
				  Retailers' Occupation Tax (taxed at the rate established for prescription and
				  nonprescription medicines in Cook County and at the rate established for
				  general merchandise in all other areas of the metropolitan region that are
				  subject to the tax, as provided in
				  70 ILCS
				  3615/4.03).
b)
Beginning January 1, 2017 and
				through December 31, 2026, menstrual pads, tampons, and menstrual cups
are exempt from the Retailers' Occupation Tax. [35 ILCS
				120/2-5(42)] Menstrual pads
				(including pantiliners) are exempt even when the label indicates that those
				products are to be used as both menstrual products and incontinence products.
				However, incontinence products that do not indicate on the label that they can
				also be used as menstrual products are not exempt.
c) Medicines and Drugs. Except for grooming
				and hygiene products described in subsection (d), a medicine or drug is any
				pill, powder, potion, salve, or other preparation for human use that purports
				on the label to have medicinal qualities. Medicines prescribed by veterinarians
				for animals are subject to the high rate of tax. A written claim on the label
				that a product is intended to cure or treat disease, illness, injury, or pain
				or to mitigate the symptoms of such disease, illness, injury, or pain
				constitutes a medicinal claim.
1) Examples of
				medicinal claims that will qualify the product for the low rate of tax include,
				but are not limited to:
A)
				"medicated";
B) "heals (a medical
				condition)";
C) "cures (a medical
				condition)";
D) "for relief (of a
				medical condition)";
E) "fights
				infection";
F) "stops
				pain";
G) "relief from poison ivy
				or poison oak";
H) "relieves
				itching, cracking, burning";
I) "a
				soaking aid for sprains and bruises";
J) "relieves muscular aches and
				pains";
K) "cures athlete's
				foot";
L) "relieves skin
				irritation, chafing, heat rash, and diaper rash";
M) "relief from the pain of sunburn";
				and
N) "soothes pain".