Skip to main content
Department of Taxation and Finance

Opioid excise tax

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.

Tax rates

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

All first sales of an opioid unit by a registrant in New York State must be reported, other than sales:

  • of buprenorphine, methadone, or morphine
  • of opioids dispensed by prescription to a consumer
  • of opioids to a purchaser outside of New York State, to be used or consumed outside of New York State, within the same filing period
  • that are canceled within the same filing period

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 conversion table.

Taxable sales include all reportable sales of opioids, minus:

  • Sales to programs operated pursuant to Public Health Law Article 40 or Mental Hygiene Law Article 32, and
  • Sales that were taxed in a previous filing period and canceled or transferred out of state in a subsequent quarter (subtracted on the return for the quarter the cancellation or transfer out of state occurred).

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

Registrants must use the Tax Department’s Opioid Excise Tax Web File application to file their calendar quarterly excise tax returns. 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.

Note: The first required filing will be for an extended period beginning July 1, 2019, and ending December 31, 2019. The return for this period is due by January 21, 2020.

Reporting periods and due dates
Quarterly period Filing due date
January 1–March 31 April 20
April 1–June 30 July 20
July 1–September 30 October 20
October 1–December 31 January 20

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 the date the return is filed if later. Records must be sufficient to determine the total units sold or transferred as well as determining the morphine milligram equivalent of the units. Records must be produced if requested by the Tax Department.

Records would include, but are not limited to:

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

The records must also show:

  • the address from which the units were shipped or delivered, and
  • the place at which actual physical possession of the units occurred.

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

A. No. Reportable sales will not include the sale of these drugs.


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

A. You will report the sales in each quarter, and then you will be allowed a subtraction for the amounts sold to these programs.


Q. How will the wholesale acquisition cost be determined?

A. See definition of wholesale acquisition cost, in Definitions below. In an arms-length transaction, the wholesale acquisition cost will typically be the amount shown on the invoice for the sale.


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

A. Visit the Department of Health conversion table.


Q. How are the morphine milligram equivalents (MMEs) calculated?

A. The formula for calculating the MMEs is:

# of units x strength per unit x MME conversion factor

Example for the calculation of MME for tablets, capsules, and other solid dosage forms: For 5 mg hydrocodone tablets, the current conversion factor listed on the MME conversion Table is 1 MME.

  • For one bottle of 500 tablets, the calculation of MMEs is:
    500 tablets x 5mg x 1 MME = 2,500 MMEs per bottle
  • For the distribution of 20 bottles each containing 2,500 MME:
    20 bottles x 2,500 MME per bottle = 50,000 Total MMEs

Example for the calculation of MME for liquids: For a 50 mg/mL meperidine hydrochloride solution, the current conversion factor listed on the MME conversion table is 0.1 MME

  • For a box of 25 x 0.5 mL ampules, the quantity = 12.5 mL
    12.5 mL x 50 mg x 0.1= 62.5 MMEs per box
  • For the distribution of 40 boxes each containing 62.5 MME:
    40 boxes x 62.5 MME = 2,500 Total MMEs

Example for the calculation of MME for a transdermal patch: For a 75 mcg/hour patch, the current conversion factor listed on the MME conversion table is 7.2 MME.

  • For a box with 5 x 1 patch, the quantity = 5 patches
    5 patches x 75 mcg x 7.2 = 2,700 MME per box
  • For the distribution of 60 boxes each containing 2700 MME:
    60 boxes x 2,700 MME = 162,000 Total MMEs

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

A. Yes. Visit the Department of Health Opioid Drug List.


Q. What if an opioid is not listed on the NDC list?

A. Send an email to mme@health.ny.gov. Include Drug Not Found in the subject line of the email.


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

A. We would require the trail of documentation from the first sale to the time that the inventory in that sale was transferred out of state and sold in another state.


Q. In a situation where the manufacturer ships directly to a wholesaler’s customer, who would have the first sale?

A. Whichever entity holds title to the product and transfers that title would be considered the seller and responsible for the payment of the tax.

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.

Opioid is an opiate as defined by subdivision twenty-three of section thirty-three hundred two of the public health law and any natural, synthetic, or semisynthetic narcotic drug as defined by subdivision twenty-two of such section 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 section thirty-three hundred six of the public health law. 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) (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.

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.

For more information, visit the Department of Health website at Opioid Excise Tax.

Updated: