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Most beverages sold by food stores, beverage centers, and similar establishments are subject to sales tax. This bulletin explains which beverages are taxable and which are exempt when sold for human consumption off the premises. Additional resources relating to sales of food and beverages in other circumstances (e.g., sales by restaurants, sales from vending machines, or sales of candy or sandwiches) are listed at the end of this bulletin.
Beverages are liquids that are suitable for humans to drink. Beverages also include products that are added to water or other liquids to make a drink (for example, coffee beans, concentrates, mixes, powders, syrups, and tea bags). (Note: Any brand name product shown in italics is included as an example and is not to be construed as an endorsement of the product.)
|Taxable beverages include:|
|Nontaxable beverages include:|
Bottle deposits are not subject to sales tax.
Sales of beverages are not taxable if the purchaser is an exempt organization that gives the seller a properly completed Form ST-119.1, Exempt Organization Exempt Purchase Certificate.
For information about purchasing beverages using coupons or food stamps, see Tax Bulletin Coupons and Food Stamps (TB-ST-140).
Most taxable beverages may be purchased for resale without payment of tax provided the purchaser gives the seller a properly completed Form ST-120, Resale Certificate. The purchaser will collect tax when the beverage is resold at retail.
An exempt beverage may be purchased without payment of tax even if the purchaser will later resell it in a taxable manner. For example, a restaurant may purchase exempt beverages without tax at a food store and resell the beverages as part of a taxable meal, without giving the seller a resale or other exemption certificate. However, the restaurant must collect tax when it sells the beverage at the restaurant.
However, heated beverages and other beverages that the seller prepares may not be purchased for resale and the seller must collect tax. When the purchaser resells a beverage of this kind, it must collect tax from the purchaser on the selling price and it may then take a credit on its sales tax return for the amount of tax it paid to the original seller. See Tax Bulletin Sales Tax Credits (TB-ST-810).
Tax Law: Sections 1105(a); 1105(d); 1115(a)(1); 1115(ff); and 1132(c)(1)
Regulations: Sections 526.5(j); 527.8; and 528.2
TSB-M-06(15)S, Supplemental Summary of Recently Enacted Legislation Affecting Sales and Use Taxes Effective in 2006
Coupons and Food Stamps (TB-ST-140)
Dietary Foods and Health Supplements (TB-ST-160)
Food and Beverages Sold from Vending Machines (TB-ST-280)
Food and Food Products Sold by Food Stores and Similar Establishments (TB-ST-283)
Listings of Taxable and Exempt Foods and Beverages Sold by Food Stores and Similar Establishments (TB ST-525)
Sales by Restaurants, Taverns, and Similar Establishments (TB-ST-806)
Sales Tax Credits (TB-ST-810)