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Last Updated: 10/10/2017

Legend Drugs

Legend drugs are drugs or gases required by federal law to be sold or dispensed in a container labeled with one of the following statements:

  • “Caution:  Federal law prohibits dispensing without prescription”
  • “Rx only”

To be exempt, legend drugs must also meet the following two requirements:

  • the item must be classified by the FDA as a drug and not a device
  • the drug must have been purchased from a wholesaler required to pay MinnesotaCare tax

Blood and blood components are not considered legend drugs. Blood derivatives, however, derived from blood, plasma, or serum through a chemical manufacturing process, are considered legend drugs.

There are two methods you can use to calculate the Legend Drug Exemption. If you cannot use Method 1, you must use Method 2.

Method 1

You may claim the actual amount you paid for the legend drugs, less any reimbursements you received for the drugs that are exempt under MinnesotaCare tax law (such as drugs reimbursed by Medicare). These reimbursements are included in the amounts reported for other exemptions.

Method 2

If you cannot determine the actual cost and exempt reimbursement amounts, you must use a calculation to determine the allowable exemption.

You can use the step-by-step instructions in the table below to complete the calculation, or you can use our Legend Drug Exemption Calculator to make this calculation for you.

Step

​Instruction ​Amount
​1 Legend Drug Purchases. The total amount you paid during the year for legend drugs or gases.
​2 Annual Gross Receipts. The total gross revenue you received during the year (that you are reporting on your Provider, Hospital, or Surgical Center Tax Return).
​3 ​Total Exemptions. The total of all other exemptions for this year (that you are reporting on your Provider, Hospital, or Surgical Center Tax Return).
​4 ​Subtract step 3 from step 2.
​5 ​Divide step 4 by step 2 (should be preceded by a decimal point).
​6 ​Multiply step 1 by step 5.

Enter the number from Step 6 above, or the Legend Drug Exemption Calculator’s result, on the Legend Drug Exemption line when you file your annual return.