Are Vitamins and Supplements Taxable?

The tax treatment of vitamins and supplements varies significantly by tax type, product use, and jurisdiction. Understanding whether these products are subject to sales tax, eligible for income tax deductions, or reimbursable through health accounts requires navigating complex regulations. This article explores the factors determining the taxability of vitamins and supplements, providing clarity on their financial implications.

Sales Tax on Vitamins

Sales tax on vitamins and supplements is determined at state and local levels, leading to variation across the United States. Many states differentiate between food products, often exempt from sales tax, and dietary supplements, which may be taxed. For example, some states classify vitamins as “food” if they have a “nutrition facts” label, while others, like Tennessee, explicitly state dietary supplements are not food for sales tax purposes and are subject to the standard sales tax rate.

The distinction between over-the-counter (OTC) medicine and general merchandise also influences taxability. Some states exempt OTC medicines from sales tax, but a vitamin’s qualification depends on its intended use—for treating a specific ailment versus general wellness. If a product has a “drug facts” label, it is more likely to be taxed as a prescription or nonprescription drug. Vitamins prescribed by a physician are frequently exempt from sales tax, even if their OTC counterparts are not. Consumers should consult their state’s tax laws for sales tax implications.

Deducting Vitamins as Medical Expenses

For federal income tax purposes, deducting the cost of vitamins as a medical expense is generally not permitted unless specific Internal Revenue Service (IRS) criteria are met. The IRS defines “medical care” as amounts paid for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.” Vitamins taken for general health or nutritional needs do not qualify for this deduction.

For vitamins to be deductible, a physician must prescribe them as medically necessary to treat a specific medical condition, not merely for general wellness. For example, Vitamin D prescribed for a diagnosed deficiency qualifies, but not for general bone health. Even if a vitamin expense qualifies, it is only deductible if the taxpayer itemizes deductions on Schedule A of Form 1040. Only the amount of qualified medical expenses exceeding 7.5% of the taxpayer’s Adjusted Gross Income (AGI) can be deducted. Proper documentation, including a doctor’s prescription and receipts, is essential to substantiate deductions.

Using Health Accounts for Vitamins

The eligibility of vitamins for reimbursement through Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) largely mirrors income tax deduction rules. Vitamins are generally not eligible for FSA or HSA reimbursement unless prescribed by a doctor for a specific medical condition. Vitamins taken for general well-being are not considered qualified medical expenses by the IRS for these accounts.

While the CARES Act of March 2020 removed the prescription requirement for many over-the-counter (OTC) drugs, making them eligible for FSA/HSA use, this change did not automatically extend to vitamins and supplements. For vitamins to be eligible, a Letter of Medical Necessity (LMN) or a prescription from a healthcare provider is required, detailing the specific medical condition being treated. FSAs are employer-sponsored accounts with a “use-it-or-lose-it” rule for funds, while HSAs are portable and allow funds to grow tax-free, but both require strict adherence to IRS guidelines for eligible expenses.