Texas Comptroller of Public Accounts    STAR System


200311235L



STAR SUPERSEDED INFORMATION

Accession No. – 200311235L

Supersede type - partial

Document superseded on - 10/21/2013

Issue(s) that caused the document to be superseded – protein
bars and sports bars marketed as a meal replacement or dietary
supplement (question #3); individually packaged chips (question #3)

Reason(s):  Statutory change - Senate Bill 1151, effective 09/01/2013,
amended Tax Code Section 151.314 to specifically provide that chips as
well as breakfast bars, granola bars, nutrition bars, protein bars, 
sports bars or yogurt bars are considered snack foods (and not a bakery item)
which will be subject to tax when sold in individual servings (less than 
2.5 oz. if not specifically labeled as an individual serving) regardless of
eating facilities or when sold through a vending machine.



November 21, 2003


************** 

Dear **************:

Thank you for your recent email concerning the items sold at your STORE 
franchise.  I have restated your questions followed by my response.

Question 1: Are fruit smoothies subject to sales tax?  These smoothies are 
nutritional drinks made with real fruit and real fruit juices blended with ice. 
 Some of the drinks have protein powders, vitamins, and minerals.  These drinks 
may be used as meal replacements.

Response 1: The smoothies are taxable because they are prepared at your 
establishment for immediate consumption.

Question 2: Are nutritional sports supplements including meal replacement 
powder packets and various dietary supplements subject to sales tax? 

Response 2: No tax is due on dietary supplements.  For purposes of this 
exemption, dietary supplements (1) contain one or more vitamins, minerals, 
herbs, amino acids, or substances to increase caloric intake; (2) are not 
represented as a food or the sole item of a meal or the diet; and (3) are 
labeled or are required to be labeled "dietary supplement" or "supplement." 
Dietary supplements, as defined in Rule 3.284(a)(5), are exempt from sales tax.

Myoplex Meal Replacement Packets (by EAS) are nontaxable powder packets that 
require further preparation. Creatine, Glutamine, multi-vitamins, individual 
vitamins, chromium picolinate, Xenadrine, Hydroxycut, Stacker 2, Yohimbe, and 
Stamina RX are also dietary supplements.  

Question 3: Are snacks such as "Healthy Chips," protein bars, and sports bars 
that are individually packaged subject to sales tax?

Response 3: Individually packaged, chips such as "Healthy Chips," are subject 
to tax when sold by an establishment with eating facilities.  Individual-sized 
bakery items, such as cookies, are not taxable unless sold with plates or other 
eating utensils. 

If the protein bars and sports bars are marketed as meal replacements, then the 
bars are subject to Texas sales and use tax when sold by an establishment with 
eating facilities.  If the protein bars and sports bars qualify as dietary 
supplements, then the bars are exempt.  

Question 4: Are pre-packaged drinks sold out of a cooler subject to sales tax?  
Your example includes ready-to-drink meal replacement shakes, energy drinks 
(carbonated and non-carbonated), electrolyte drinks, weight loss drinks, and 
bottled water.

Response 4: Meal replacement drinks are subject to Texas sales and use tax when 
sold by an establishment with eating facilities.  Bottled water is not subject 
to tax as long as it is non-flavored water.  Drinks that are dietary 
supplements and drinks that are 50 percent juice or more are not taxable.  All 
other drinks are taxable.

This opinion is based on the information presented.  Other information though 
similar may provide a different result.   

If you have any questions or need additional information, you can reply to this 
email, call me at 1-800-531-5441 ext. 5-0330, or write to Tax Policy Division, 
P. O. Box 13528, Austin, Texas 78711-3528.

Our goal is to provide you with prompt, professional service.  Please take a 
moment to complete our on-line survey at 
http://aixtcp.cpa.state.tx.us/surveys/tpsurv/.

Sincerely,


Rita Catania




-----Original Message-----
From: ************** [mailto: <**************>]
Sent: Thursday, October 02, 2003 3:56 PM
To: tax.help@cpa.state.tx.us
Subject: Tax Exempt Items in my store


Hello,

I own a STORE Franchise (Tax # **************), and I have been informed that 
some of the items in my store may be tax exempt.

The main thing we sell are Fruit Smoothies.  These are nutritional drinks made 
with real fruit and real fruit juices blended with ice. Some of the drinks have 
added ingredients such as protein powders, vitamins and minerals.  These are 
drinks that may be used as a meal replacement.

We also sell Nutritional Sports Supplements.  These include muscle building 
products and diet control products such as:

Myoplex Meal Replacement Packets (by EAS)
Creatine (Various brands)
Glutamine
Multi-Vitamins (various brands)
Individual Vitamins (such as Vit.E and C)
Chromium Picolinate
Xenadrine (by Cytodyne)
Hydroxycut (by Muscletech)
Stacker 2
Sex Enhancemant products (Yohimbe)(Stamina RX)

We sell snacks such as:

Healthy Chips and snacks(individually packaged)
Protein Bars
Sports Bars

We sell Pre-Packaged Drinks out of a cooler such as:

Ready-to-Drink meal replacement shakes (high protein)
Energy Drinks (carbonated and non-carbonated)
Electrolyte drinks
Weight Loss Drinks
Bottled Water

I was just needing to know which of these items, if any, are tax exempt.
Thank you for your help.


**************




ACCESSION NUMBER: 200311235L   
SUPERSEDED: S 
DOCUMENT TYPE: L 
DATE: 11/21/2003 
TAX TYPE: SALES