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How is sales tax handled on Medicare Part D prescription drugs?

Answer #628 -- ( Published 01/11/2007 10:30 AM | Updated 07/12/2017 10:39 AM )

How is sales tax handled on beneficiary co-payments on Medicare Part D prescription drugs?

Pharmacies may not add sales tax on any beneficiary co-payments for drugs covered under the Medicare Part D program.

According to the United States Department of Health and Human Services, sales tax cannot be added to a beneficiary's co-payment on covered drugs under the Medicare Part D program. Any sales tax due is the responsibility of the private Prescription Drug Provider (PDP), not the beneficiary. For example, a qualifying senior covered under Medicare Part D with a $10 co-payment may not be charged tax on that co-payment.

Pharmacies found to be in violation may be subject to penalties.

For more information, please call the Illinois Department of Revenue at 217 782-2844.

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