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

How is sales tax handled 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 or the Illinois Cares Rx 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.  The same applies to the state's Illinois Cares Rx 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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