Opioid excise tax

All first sales of an opioid unit by a registrant in New York State (NYS) must be reported on a quarterly opioid excise tax return, other than first sales:

• of buprenorphine, methadone, or morphine;
• of opioids that are subsequently distributed outside of NYS, within the same filing period as the first sale, for use or consumption outside of NYS; 
• that are canceled within the same filing period as the first sale.

Visit the Department of Health Opioid Drug List.

All sales must be reported using morphine milligram equivalents (MMEs), calculated using an MME conversion factor. Visit the Department of Health Morphine Milligram Equivalent (MME) Calculation Guidance.

All reportable sales of opioids are taxable, except for sales to:

• programs operated pursuant to Public Health Law Article 40; or
• programs operated pursuant to Mental Hygiene Law Article 32.

Note: Sales on which tax was paid in a previous filing period that are canceled or distributed out of NYS, for use or consumption outside of NYS, in a subsequent filing period are subtracted on the return for the filing period the cancellation or distribution out of NYS occurred.

See Reportable Sales for treatment of sales canceled or distributed out of state within the same filing period as the first sale.

Registrants must use the Tax Department’s Opioid Excise Tax Web File application to file their excise tax returns for each calendar quarter. Returns must be filed and the tax paid no later than the 20th day of the month following the quarter in which the opioid was sold. A return must be filed even if the registrant had no sales during the quarter. The registrant must have a Business Online Services account to file tax returns and remit the excise tax.

1. Log in to your Business Online Services account.
2. Select the ≡ Services menu in the upper left-hand corner of your Account Summary homepage.
3. Select Other taxes, then select Opioid excise tax web file from the expanded menu.

For important payment information, see ACH debit block information.

Note: The first required filing—which was due January 21, 2020—covered an extended period beginning July 1, 2019, and ending December 31, 2019. 

If the due date falls on a Saturday, Sunday, or legal holiday, the return is due on the next business day.

All records must be retained for six years after the due date of the return they relate to, or after the date the return is filed, if later. Records must show the total number of units sold, the MMEs of the units, and provide sufficient detail to independently determine the taxable status of each sale and the amount of tax due for the filing period.

Records include, but are not limited to:

• sales slips
• invoices
• receipts
• statements or memos of sales
• documentation of a cancelled sale
• documentation of a subsequent distribution out of New York State

The records must also show either:

• the address from which, and to which, the units were shipped or delivered; or
• the place at which actual physical possession of the units was transferred.

Will there be a list of opioids that are subject to the tax?

What if an opioid is not listed on the opioid drug list?

Are the sales of buprenorphine, methadone, or morphine required to be reported? 

How will the wholesale acquisition cost be determined?

Where can we find the morphine milligram equivalent (MME) conversion factor? 

How are the morphine milligram equivalents (MMEs) calculated? 

How will sales to the programs that are excepted under the Public Health or Mental Hygiene Law be handled?  

What documentation will be required to substantiate that a sale was eventually distributed out of state and considered an exception to the tax?   

An out-of-NYS manufacturer holds title to an opioid and transfers title (for consideration) and possession of the opioid to a purchaser in NYS. Is the sale a reportable sale if possession transfers in NYS but the title passes outside of NYS?       

A NYS manufacturer holds title to an opioid and transfers title (for consideration) and possession of the opioid to an out-of-NYS wholesaler. Subsequently, the out-of-NYS wholesaler transfers title (for consideration) and possession of that opioid to a purchaser in NYS. Which entity is responsible for reporting the sale and paying the opioid excise tax due?           

An out-of-NYS manufacturer holding title to an opioid transfers title (for consideration) and possession of the opioid to an out-of-NYS wholesaler. Subsequently, the out-of-NYS wholesaler transfers title (for consideration) and possession of that opioid to a purchaser in NYS. Which entity is responsible for reporting the sale and paying the opioid excise tax due?           

In the first calendar quarter of 2020 a NYS manufacturer holds title to an opioid and transfers title (for consideration) and possession of the opioid to a NYS distributor (the first sale). Subsequently, within the same calendar quarter as the first sale, the NYS distributor distributes the opioid outside of New York State, for use or consumption outside of New York State. Must the NYS manufacturer report the sale and pay the opioid excise tax due?              

In the first calendar quarter of 2020 a NYS manufacturer holds title to an opioid and transfers title (for consideration) and possession of the opioid to a NYS distributor (the first sale). Then, in a filing period subsequent to the filing period of the first sale, the NYS distributor distributes the opioid outside of New York State, for use or consumption outside of New York State. Must the NYS manufacturer report the sale and pay the opioid excise tax due?              

An out-of-NYS manufacturer holding title to an opioid and transfers title (for consideration) and possession of the opioid to a Hospice program in NYS (operated pursuant to Public Health Law Article 40). Is this a reportable sale for purposes of the opioid excise tax? Is this a taxable sale for purposes of the opioid excise tax?           

An out-of-NYS manufacturer holds title to an opioid and transfers title (for consideration) and possession of the opioid to a NYS distributor. Subsequently, the NYS distributor transfers title (for consideration) and possession of that opioid to a Hospice program in NYS (operated pursuant to Public Health Law Article 40). Which entity is responsible for reporting the sale and paying the opioid excise tax due?            

A NYS manufacturer holds title to an opioid and transfers title (for consideration) to a company headquartered out of NYS but transfers possession of the opioid to a NYS distribution center of that company. The opioid is shipped directly to the NYS distribution center. Must the NYS manufacturer report the sale and pay the opioid excise tax due?           

A NYS manufacturer holds title to an opioid and transfers title (for consideration) to Company B, headquartered in NYS, but transfers possession of the opioid directly to an out-of-NYS distribution center of Company B. The opioid is shipped by the NYS manufacturer directly to the out-of-NYS distribution center. Must the NYS manufacturer report the sale and pay the opioid excise tax due?            

A first sale is any transfer of title to an opioid unit for consideration where actual or constructive possession of such opioid unit is transferred by a registrant holding title to such opioid unit to a purchaser or its designee in this state for the first time. A first sale does not include either:

• the dispensing of an opioid unit pursuant to a prescription to an ultimate consumer, or
• the transfer of title to an opioid unit from a manufacturer in this state to a purchaser outside this state when such opioid unit will be used or consumed outside this state.

Opioid is an opiate, as defined by Public Health Law § 3302(23), and any natural, synthetic, or semisynthetic narcotic drug, as defined by Public Health Law § 3302(22), that has agonist, partial agonist, or agonist/antagonist morphine-like activities or effects similar to natural opium alkaloids, and any derivative, congener, or combination thereof listed in schedules II-V of Public Health Law § 3306. For purposes of the opioid excise tax, the term opioid does not include buprenorphine, methadone, or morphine.

Registrant means any person, firm, corporation, or association that holds and transfers title to an opioid unit and:

• is required to register with the New York State Department of Health as a manufacturer or distributor of a controlled substance; or
• is required to register with the New York State Department of Education (NYS DOE) as a wholesaler, manufacturer, or outsourcing facility; or
• is a nonresident establishment excepted from registration with the NYS DOE under NYS Education Law § 6808-b(2).

Morphine milligram equivalents (MMEs) means the number of units multiplied by the strength per unit multiplied by the morphine milligram equivalent conversion factor.

• Unit is a single finished dosage form of an opioid, such as a pill, tablet, capsule, suppository, transdermal patch, buccal film, milliliter of liquid, milligram of topical preparation, or any other form.
• Strength per unit is the amount of opioid in a unit, as measured by weight, volume, concentration or other measure.
• Morphine milligram equivalent conversion factor is that reference standard of a particular opioid as it relates in potency to morphine as determined by the Commissioner of Health.

Wholesale acquisition cost is the manufacturer’s list price for an opioid unit to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data.

Visit the Department of Health website at Opioid Excise Tax.