Missouri – Taxability of Ready-to-Eat Foods, Vitamins, and Supplements

SALT Report 2583 – The Missouri Department of Revenue issued a letter ruling regarding the application of sales tax to a Taxpayer’s sales of ready to eat foods, vitamins, and supplements. The Taxpayer operates a weight loss center and diet food retail business that sells ready-to-eat granola bars, chips, soup mixes, drinks, vitamins, and supplements.

All of the items are manufactured and pre-packaged by a third party, and are sold at room temperature for off-premises consumption by those participating in the Taxpayer’s weight loss program. The labeling for the ready-to-eat granola bars, chips, soup mixes, and drinks contain a nutrition facts label. Similarly, the vitamins and supplements packaging contain a supplement facts label.

The Taxpayer requested a ruling to determine whether its sales of the food items, vitamins, and supplements were subject to tax under Section 144.014, RSMo. If so, what tax rate would apply?

In its ruling, the Department referred to Section 144.014.1, RSMo which provides that tax is levied and imposed on all retail sales of food at the rate of 1%. Section 144.014.2, RSMo, defines food as “any food or food product for home consumption” as provided in 7 U.S.C. Section 2012 of the Federal Food Stamp Program.

Based on the above regulations, the Department determined that the Taxpayer’s ready-to-eat granola bars, chips, soup mixes, and drinks meet the definition of “food” under Section 144.014.2, RSMo, because they are manufactured and pre-packaged by a third party, sold at room temperature for off premises consumption, and have a nutrition facts label. Therefore, the Taxpayer’s sales of these items qualify for the reduced sales tax rate of 1% under Section 144.014.1, RSMo.

However, the Taxpayer’s sales of vitamins and supplements do not qualify for the reduced food tax rate because they do not meet the definition of “food” that may be purchased with food stamps under 7 U.S.C. Section 2012. Therefore, the Taxpayer’s sales of vitamins and supplements are subject to the retail sales tax rate imposed under Section 144.020.1(1), RSMo.

For Further Information

Missouri Department of Revenue – Letter Ruling #LR 7262