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Generally, food and food products sold by food stores are exempt from sales tax. However, there are exceptions. This bulletin explains what kinds of food are subject to sales tax and which are exempt when sold by food stores and similar establishments, including supermarkets, grocery stores, convenience stores, etc. 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.
The following items are examples of foods and food products that are exempt from sales tax, unless sold under the conditions described in this bulletin that would render them taxable. This list includes some, but not all, of the foods that may be sold without collecting sales tax. See also Tax Bulletin Listings of Taxable and Exempt Foods and Beverages Sold by Food Stores and Similar Establishments (TB-ST-525). (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.)
Generally, food sold at food stores is taxable when sold under any of the following conditions:
Also, the following categories of food are taxable:
All food that is sold in a heated state is taxable. This includes food that is cooked to order and food that is kept warm using heat lamps or other warming devices. Examples of these foods are:
food sold at a hot buffet in the store.
Food sold that may be eaten at an eating area (i.e., an area with tables and seating) in the store or just outside the store is taxable. This includes food sold at a:
hot or cold buffet.
Food that is prepared and arranged on a plate or platter by the seller, and that is ready to be eaten is taxable. It doesn't matter whether the food is sold to be eaten at the store or another place, or whether it's served hot or cold. Ready to be eaten means that the food is placed on an individual plate or container, or on a serving platter, and doesn't require any more preparation. Examples of this include:
It also includes platters prepared by the store such as:
Food that is cooked by the store and then packaged and refrigerated, but not otherwise arranged on a plate or platter, is not taxable if sold for off-premises consumption. For example, a chicken roasted by a food store that is then cooled, packaged and sold from a refrigerated case is not taxable. However, any food that is sold in a heated state is taxable.
Sandwiches are generally taxable, whether they are sold hot or cold. For additional information, see Tax Bulletin Sandwiches (TB-ST-835).
Candy and confectionery are generally subject to sales tax. For specific information about candy and candy-coated foods, see Tax Bulletins Candy and Confectionery (TB-ST-103) and Food and Beverages Sold from Vending Machines (TB-ST-280).
Most dietary foods are not taxable. For information about what foods are considered dietary, see Tax Bulletin Dietary Foods and Health Supplements (TB-ST-160).
When food that is exempt from tax is sold in combination with a taxable item for a single charge (such as cheese and a cutting board), the entire charge is subject to sales tax. Other examples are trail mix containing chocolate candy, and children's prepackaged lunches containing deli meat, crackers, and a candy bar sold for a single charge. Similarly, when food is sold in combination with heated food on plates or as meals for a single charge, the entire charge is taxable.
How food is presented when sold may determine whether the sale is taxable or exempt. The following table provides some examples of foods that are exempt in one form but subject to sales tax in another form.
|Food||Exempt if||Taxable if|
|cold cuts||sliced and sold by weight||arranged on food platter|
|pizza||frozen, refrigerated, unheated||heated|
|hot dog||refrigerated (packaged)||served on a bun or heated|
|fish||sold unheated||heated or served in a sandwich|
|bread||sold by the loaf (whole or sliced)||served with a bowl of soup|
|bananas||sold whole, individually or by the bunch||peeled or sliced as part of a fruit platter|
|bagel||sold by quantity (whole or sliced)||toasted, buttered, or with cream cheese|
|salad mix||packaged in bag||from a self-serve salad bar or prepared and arranged on a plate|
|ice cream||sold in a container by weight (including hand-packed pints, quarts, etc.)||made-to-order cone or sundae|
|macaroni salad||packaged and sold by weight||served with a sandwich, served in a tray as a side dish or on a plate, or from a self-serve salad bar|
|chicken wings||sold unheated||sold heated|
Certain purchasers do not have to pay tax on their purchases, including food that may otherwise be taxable (e.g., purchases by an exempt organization). The purchaser must give the food vendor a properly completed certificate. See Tax Bulletin Exemption Certificates for Sales Tax (TB-ST-240).
For information about sales tax on food purchased with coupons or food stamps, see Tax Bulletin Coupons and Food Stamps (TB-ST-140).
Tax Law: Sections 1105(a); 1105(d); 1115(a)(1); and 1132(c)(1)
Regulations: Sections 527.8 and 528.2
Beverages Sold by Food Stores, Beverage Centers, and Similar Establishments (TB-ST-65)
Candy and Confectionery (TB-ST-103)
Coupons and Food Stamps (TB-ST-140)
Dietary Foods and Health Supplements (TB-ST-160)
Exemption Certificates for Sales Tax (TB-ST-240)
Food and Beverages Sold from Vending Machines (TB-ST-280)
Listings of Taxable and Exempt Foods and Beverages Sold by Food Stores and Similar Establishments (TB ST-525)
Purchases by Restaurants, Taverns, and Similar Establishments (TB-ST-695)
Sales by Restaurants, Taverns, and Similar Establishments (TB-ST-806)
Sales Tax Credits (TB-ST-810)
Recordkeeping Requirements for Sales Tax Vendors (TB-ST-770)