Drugs that are purchased under a prescription are exempt from sales and use tax. In addition to standard prescription drugs, this exemption also includes over-the-counter drugs for human use that are purchased with a prescription. The label must identify the substance as a drug. Over-the-counter drugs purchased without a prescription are subject to sales tax.
Reference: Important Notice 07-18. Tenn. Code Ann. §§ 67-6-102, 67-6-314, 67-6-319, and 67-6-320.
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