Northern Virginia Doctors Hospital Corp. v. Department of Taxation

Northern Virginia Doctors Hospital Corporation and Doctors Hospital Pharmacy, Inc., filed their petitions in the court below seeking to correct an erroneous assessment for sales taxes made by the Virginia Department of Taxation, Sales and Use Tax Division, on the sale of drugs by the Pharmacy for use by patients in the Hospital. Hospital and Pharmacy appeal the final order of the lower court denying the relief sought.

The dispositive question is whether the drugs thus assessed are sales to the Hospital and thereby subject to a sales tax under Code § 58-441.4 or whether they are medicines and…