Legend Drug Use Tax Instructions - Minnesota Department Of Revenue

General Information

Who Must File

tronically for all future years. We will send

To determine your estimated tax payments,

you a notice the first year you are required

see the MinnesotaCare estimated tax in-

You’re required to file a MinnesotaCare tax

to pay electronically.

structions for Legend Drug Use Tax, which

return and pay the use tax on legend drugs if

are available on our website.

you receive legend drugs from a vendor that

A 5 percent penalty will be assessed if you

Penalty for Underpaying Estimated Tax.

is not required to pay the Wholesale Drug

fail to pay electronically when required,

If any payment is less than the required

even if a check payment is received on time.

Distributor Tax.

amount or is paid late, an additional tax

The following situations are examples when

Filing Due Date

charge (ATC) for underpaying the estimat-

you would be subject to the use tax:

ed tax will be assessed.

Annual Tax Return

• You are a pharmacy that receives legend

When you file your annual tax return, our

drugs in intercompany transfers.

The regular due date for filing your annual

e-Services system will calculate the under-

MinnesotaCare tax return and paying any

payment penalty, if any, for you.

• You are a mail order pharmacy that has

additional tax is March 15 following the

nexus in Minnesota and receives legend

Reporting Business

end of the year in which you received the

drugs that you sell in Minnesota.

receipts.

Changes

• You are a pharmacy that receives legend

The return must be filed even if there is

Be sure to update your business information

drugs from a drug wholesaler that is

no additional tax due. If March 15 falls on

if you:

not required to pay the MinnesotaCare

a weekend or holiday, returns filed on the

• change the name, address, owner/officers,

Wholesale Drug Distributor Tax.

next business day are considered timely.

or ownership of your business;

To determine if a wholesaler is required to

• make any other changes (such as email

pay the tax, either check your invoice (which

Extension of Time to File

address, phone number, or contact per-

may show the MinnesotaCare tax) or verify

If you cannot file your return by the regular

son);

it with the wholesaler. If you still cannot

due date, you may request a 60-day filing

• need to add or delete a tax type;

determine if the wholesaler is required to

extension. To request an extension for your

• close your business; or

pay the tax, please contact us.

2016 return, call 651-282-5533 no later than

• are no longer required to file and pay

March 15, 2017.

MinnesotaCare tax.

Definition of Legend Drugs

A filing extension does not extend the time

To update, go to our website and log in to

Legend drugs are drugs or gases that are

you have to pay your tax. You must pay

e-Services. For additional information, see

classified by the FDA as a drug, not as a

any tax you owe by the regular due date or

Managing Your Account Profile in e‑Services

device, and are required by federal law to be

you will be assessed penalties and interest.

on page 5.

sold or dispensed in a container that bears

For 2016 returns, the regular due date is

one of the following statements:

Recordkeeping

March 15, 2017. To pay electronically, go to

• “Caution: Federal law prohibits dispens-

You should keep all internal accounting

our website and log in to e-Services.

ing without prescription, ” or

records and external third-party documen-

Estimated Tax

• “Rx only. ”

tation that support the amounts reported on

Requirements

your MinnesotaCare tax return.

Blood, blood components, and blood de-

This includes any paper records and any re-

You’re required to make estimated tax pay-

rivatives. Blood and blood components are

cords that you receive or store electronically.

ments during the year if your total annual

not considered legend drugs under Minne-

Some examples of paper and electronic

MinnesotaCare tax will be more than $500.

sota law and are not subject to Legend Drug

records include:

Use Tax.

If your total annual tax will be $500 or less,

• drug purchase invoices

you may pay your tax when you file your

Blood derivatives, however, which are de-

• all other summary and detail reports,

annual tax return and are not required to

rived from blood, plasma, or serum through

schedules, ledgers, and journals

make estimated payments during the year.

a chemical manufacturing process, are con-

All documentation should be available for

sidered legend drugs and are taxable.

Due Dates. Estimated tax payments are due

the department to review. If you are audited,

quarterly by the 15th day of April, July, and

you will be asked to provide between 4 and

Electronic Filing and

October of the current year and January 15

6 years of records. Exemptions may be de-

Payments

of the following year.

nied if your documentation is incomplete.

If the due date falls on a weekend or holiday,

Annual Returns

Statute of Limitations

payments electronically made or post-

File your annual return electronically using

The department may audit your return

marked the next business day are consid-

our e-Services system (see page 3).

within 3½ years from the due date of the

ered timely.

return or the date you filed the return,

Payments

Each estimated tax payment must be at least

whichever is later. If there is an error in

You are required to pay electronically if

the lesser of:

the amount of tax you reported, and the

your tax liability was more than $10,000 for

• 90 percent of one-fourth of your actual

difference between the original amount and

any one Minnesota business tax during the

tax for the current year; or

the correct amount is 25 percent or more,

previous fiscal year (July 1–June 30).

we have 6½ years to audit the return. There

• one-fourth of your actual tax for the

If you are required to pay any Minnesota

is no time limit if we find you have

previous year if you were in business for

business tax electronically for one year, you

fraudulently reported tax information

the entire year and you had a tax liability.

must pay all Minnesota business taxes elec-

or if you have not filed a return.

Continued

Legend Drug Use Tax Instructions - Minnesota Department Of Revenue - 2016 Page 2

Related Articles

Related forms

Related Categories