LR 8246
Taxability of Candy Sales
September 15, 2023
Dear Applicant:
This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated April 11, 2023.
The facts as presented in your letter ruling request are summarized as follows:
Applicant is a business that sells various in-house made fudge, in-house made chocolate, and various other types of individual pieces of candy. The candy does not require further preparation and is not served hot. These candies are served "to go".
ISSUE:
Are bulk candy, in-house made fudge, and individual in-house made chocolate sales taxed at the low food tax rate?
RESPONSE:
Yes. Bulk candy, in-house made fudge, and individual in-house made chocolate sales are taxed at a low food tax rate.
Section 144.014. RSMo, taxes retail sales of food at a rate of one percent. "Food" for this statute is defined to include only those products eligible as food under 7 U.S.C. Section 2012 (under what was formally called the food stamp program, but is now the "Supplemental Nutritional Assistance Program" or "SNAP Program").
7 CFR Section 271.2 defines "eligible foods" in relevant part to include any food or food product intended for human consumption except hot food products prepared for immediate consumption.
The SNAP Program is administered by the United States Department of Agriculture ("USDA"). The USDA has identified various types of eligible food items that qualify for SNAP Program benefits. These items of eligible food includes snack and dessert food items such as chocolate, fudge, and candy of all kinds. See U.S. Department of Agriculture, RPMD Policy Memorandum 2020-04, Retailer Eligibility- Clarification of Criterion A and Criterion B Requirements, (clarifying the difference between who can qualify as an eligible retailer under the SNAP Program and what are eligible foods that can be sold by an eligible retailer under the SNAP Program); see also U.S. Department of Agriculture, FNS-GD-2020-0134, Accessory Foods List (listing items that are eligible foods under the SNAP Program that are not staple foods for determining retailer eligibility).
In this instance, the various candies sold by the Applicant are supplemental, dessert foods eligible under the SNAP Program as determined by the USDA. Therefore, those foods are also subject to the reduced tax rate found in Section 144.014, RSMo.
This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals. If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change. For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.
Should additional information be needed, please contact Legal Counsel Nathan Jefferson, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.
Sincerely,
Wayne Wallingford