California – Taxability of Food Products and Nutritional Supplements

SALT Report 2948 – The California State Board of Equalization issued guidance regarding the criteria they use to determine whether a product is a food product or a food supplement.  The notice states that a product’s label may claim that it is a supplement that helps with certain dietary deficiencies or that it improves health.  However, there are many factors the BOE will consider when it determines whether an item qualifies as a nontaxable food product or a taxable food supplement.

For example, the BOE will consider the product’s form, proteins, minerals, and caloric intake when they make a determination.  Therefore, if a product meets the following criteria, it is subject to tax:

  • It is in liquid, powdered, granular, tablet capsule, lozenge, or pill form, and
  • It is described on its label or package as being a food supplement, food adjunct, dietary supplement, or dietary adjunct, or
  • It is prescribed or designed to remedy specific dietary deficiencies or to increase or decrease those areas of human nutrition dealing with vitamins, proteins, minerals, or calories

Additionally, the notice provides that the following products are not currently taxable because their labels meet the definition of a nontaxable food product:

  • Ensure,
  • Ensure Plus, and
  • Glucerna

However, Ensure Bone Health, Ensure Immune Health, Ensure Muscle Health, and Ensure High Protein are subject to tax because these products are considered food supplements.

For Further Information

California State Board of Equalization – Tax Information Bulletin, Publication 388