Illinois issued a general information letter on the sales and use tax treatment of hormone, aesthetic, wellness, weight-control, and exercise offerings sold by clinics and similar providers. The Department states a baseline rule: a service performed in Illinois with no transfer of tangible personal property generally is not subject to sales and use tax. When a clinic sells products, prescription and non-prescription medicines, drugs, and medical appliances for human use; these are taxable at Illinois’ 1% reduced rate and are not exempt. The letter also notes that qualifying foods are taxed at a lower rate through December 31, 2025, and local sales taxes might apply.
For vitamins, supplements, and nutraceuticals, the letter explains that the rate depends on product classification and how items are sold. Nutritional supplements and vitamins qualify for the rate that applies to food for human consumption when they meet Illinois’ criteria. For bundled sales, the letter uses a value test: when items are sold together in a pack, set, or gift basket, the reduced rate applies when more than 50% of the value of the items sold together comes from food and or prescription or non-prescription medicines, drugs, and or medical appliances. Otherwise, the general rate applies.
The letter also ties the 1% rate to the definition for “drug” status based on label claims. A medicine or drug is described as a product for human use whose label purports medicinal qualities, such as curing or treating disease, illness, injury, or pain, or mitigating symptoms. Grooming and hygiene products stay outside the 1% rate and are taxed at the standard rate of 6.25%, even with medicinal claims. Orally ingested products, including vitamins, supplements, weight loss or weight gain products, are not grooming and hygiene products, so those items qualify for the 1% rate when they meet the stated requirements. Clinics should align invoicing and point-of-sale tax settings to separate services from product sales, review label claims used to support drug treatment, and document bundled pricing and item values to support the rate applied on audit. (General Information Letter ST 25-0046-GIL, Illinois Department of Revenue, (Aug. 27, 2025)