Opioid excise tax
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Effective July 1, 2019, there is an excise tax imposed on the first sale of an opioid unit by a registrant in New York State.
What is a first sale?
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 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.
It is presumed that every sale by a registrant in this state is the first sale unless it is established otherwise. The burden of proving that a sale does not qualify as a first sale is on the registrant.
Who is considered a registrant?
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) (see Note below).
Note: The NYS DOE generally requires nonresident establishments to register (all nonresident establishments that ship, mail, or deliver prescription drugs and/or devices to other registered establishments, authorized prescribers, and/or patients into this state must be registered with the NYS DOE) however, this registration requirement with the NYS DOE does not apply to such nonresident establishments for intra-company transfers between any division, affiliate, subsidiaries, parent or other entities under complete common ownership and control. The nonresident establishments excepted from registration with the NYS DOE under NYS Education Law § 6808-b(2) are considered registrants for purposes of the opioid excise tax.
There are two tax rates:
- $.0025 on each morphine milligram equivalent with a wholesale acquisition cost of less than $0.50 per unit
- $.015 on each morphine milligram equivalent with a wholesale acquisition cost of $0.50 or more per unit
For more information, visit the Department of Health website at Opioid Excise Tax.