The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 5601

November 30, 1979

TAXATION:

Exemption of prescription drugs for human use from sales and use tax

CONSTITUTION OF MICHIGAN:

Art 9, Sec. 8 (exemption of prescription drugs and food from sales and use tax)

When oxygen is prescribed by a licensed physician or other licensed practitioner for use in the diagnosis, cure, mitigation, treatment or prevention of human disease, it is constitutionally exempt from sales and use taxes whether purchased from a licensed pharmacist or a medical supply house.

Honorable Stephen V. Monsma

State Senator

The Capitol

Lansing, Michigan 48909

You have requested my opinion as to whether oxygen purchased by prescription of a physician from a medical supply house, rather than a licensed pharmacy is subject to sales tax.

Const 1963, art 9, Sec. 8 states in pertinent part:

'No sales tax or use tax shall be charged or collected from and after January 1, 1975 on the sale or use of prescription drugs for human use, or on the sale or use of food for human consumption except in the case of prepared food intended for immediate consumption as defined by law.' [Emphasis added]

With regard to whether oxygen is a prescription drug, it will be noted that section 17703(4) of the Public Health Code, MCLA 333.17703(4); MSA 14.15(17703)(4), provides that the term 'drug' means, inter alia:

'(b) A substance intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in human beings or other animals.'

It will be further noted that section 17708(4), MCLA 333.17708(4); MSA 14.15(17708)(4), provides that the term 'prescription drug' means, inter alia:

'(a) A drug dispensed pursuant to a prescription.'

Therefore, while a prescription is not required for dispensing oxygen, it will qualify as a 'prescription drug' if it is prescribed by a physician and is intended to be used in the diagnosis, cure, mitigation, treatment, or prevention of disease.

The Legislature has defined ther term 'prescription drugs for human use' in 1933 PA 163, Sec. 4g(2), as added by 1974 PA 310 and amended by 1978 PA 275, of the general sales tax act, 1933 PA 163, Sec. 4g(2), MCLA 205.54g; MSA 7.525(7)(2), to mean:

'. . . insulin or drugs dispensed by a licensed pharmacist to fill individual prescriptions prescribed by a licensed physician or other licensed practitioner of the healing arts solely for the use of a designated person.' [Emphasis added]

Thus the Legislature has restricted the sales and use tax exemption of 'prescription drugs for human use' to those which are purchased from licensed pharmacists upon individual prescriptions. It is, therefore, necessary to consider whether this definition of the term 'prescription drug for human use' is constitutional in view of the fact that it is more restrictive than the term 'prescription drugs for human use' employed in Const 1963, art 9, Sec. 8, supra, for a statutory enactment in conflict with the Constitution is invalid. C. F. Smith Co v Fitzgerald, 270 Mich 659; 259 NW 352 (1935).

It is my opinion that the Legislature may not impose as a condition of receiving the benefit of a constitutionally-established exemption from the sales and use tax, a requirement that a prescription drug for human use be purchased from a particular source inasmuch as drugs, including oxygen, prescribed by licensed physicians or other licensed practitioners of the healing arts, for the use of a designated person, are 'prescription drugs for human use,' whether purchased from a pharmacist or medical supply house, and are, therefore, constitutionally exempt from sales and use taxes.

Frank J. Kelley

Attorney General