Tax season can be taxing for owners and managers of food stores. But tax filing can be made simpler and more precise by knowing which foods are taxable and which are not. It is crucial to remember the distinction between taxable and non-taxable food items may be subject to special exclusions and regulations in various states. So, to ensure compliance with local laws, hire experts specializing in grocery store taxation. Grocery shop owners and operators can confidently handle tax return season by knowing the distinction between taxable and non-taxable food goods and adhering to correct tax preparation and filing procedures.
Note
Sales tax is not applied to food or food ingredients which include anything that is:
- In liquid, a concentrated, solid, frozen, dried, or dehydrated form.
- Sold for ingestion or chewing by humans.
- Consumed for their taste or nutritional value.
Non-taxable Food and Food Ingredients
- Baking powder
- Baking soda
- Beverage powders (unless dietary supplement)
- Bread
- Cakes and cake icing
- Cereals
- Cereal bars with flour
- Chip dip
- Chips (potato, corn, etc.)
- Cocoa
- Coffee
- Condiments
- Cookies
- Cooking oil
- Dairy products
- Dried fruit (without sweeteners)
- Eggs
- Fish
- Flavorings
- Flour
- Food coloring
- Frozen meals
- Fruit juices (more than 50% juice)
- Fruits
- Gelatin
- Granola
- Gravies
- Herbs (seasoning)
- Ice cream, sherbet, and frozen yogurt, including pre-packaged novelties
- Ice cubes or blocks
- Malted milk powder
- Margarine
- Meat
- Nuts
- Peanuts
- Pies
- Popcorn
- Popsicles
- Poultry
- Pumpkins
- Raisins
- Relishes
- Saccharin
- Salad dressing
- Salt
- Sauces
- Seasonings
- Shortening
- Spices
- Spray candy
- Sugar (including colored)
- Sunflower seeds
- Sweeteners
- Tea (bags, leaves, or powdered)
- Trail mix (pre-packaged with candy)
- Vegetables
- Water
Note
Prepared food, soft drinks, confectionery, and dietary supplements are all examples of taxable food supplied through vending machines.
Taxable Items
The list of goods subject to taxation because they fall under these subcategories not covered by the food exemption is provided below. In brackets, the taxable subcategory is mentioned.
- Baking chips, sweetened baking bars, candy-coated items (candy)
- Beer (alcoholic beverage)
- Beer nuts (candy)
- Breath mints (candy)
- Cake decorations (candy)
- Cereal bars without flour
- Dried fruit with sweeteners (candy)
- Fruit drinks with 50% or less fruit juice (soft drink)
- Gum (candy)
- Herbal supplements (dietary supplements)
- Honey-roasted and honey-coated nuts (candy)
- Marshmallows (candy)
- Party trays (prepared food)
- Soda pop (soft drinks)
- Sweetened baking bars or chips (candy)
- Sweetened bottled water (soft drink)
- Tea (with “supplement facts” label)
- Tobacco products, except cigarettes which are not taxed at retail (tobacco)
- Vitamins and minerals (dietary supplement)
Make your tax filing stress-free
For more detailed and specific information on food and food ingredients, you can visit the Minnesota Department of Revenue website at Food and Food Ingredients | MN Department of Revenue
Getting a professional team to assess all the aspects of tax filing can be beneficial in ensuring compliance and maximizing tax benefits while reducing tax-related stress. Hence, Prudent Accountants is the most reliable and proficient team of experts who can help with tax filing so that you can concentrate on managing your businesses in Minneapolis (Minnesota).
