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Understand Sales Tax for Food & Beverage
Sales Tax by State: Is Candy Taxable?
byOctober 26, 2020
Last updated October 26, 2020
As Halloween approaches, chances are you’re planning on buying some candy for trick or treaters, or just for yourself! Or better yet, if you sell online, you’ve racked up the sales on chocolates and candy corn.
Candy is one of those products that can be taxed differently in different U.S. states. Some states lump candy in with groceries and require the same sales tax rate. (You can read more about the taxability of groceries in each U.S. state here.) Other states tax candy at the combined full state sales tax rate, even if other groceries are tax exempt or taxed at a lesser rate. If you sell on Amazon, you’re in luck. As long as you code your candy items with the correct product tax codes, Amazon will make sure to charge the correct amount of sales tax in each U.S. state.
But if you sell on venues other than Amazon, you may be wondering whether or not you should be charging sales tax on candy. Find your states on the list below to find out!
In Which U.S. States is Candy Taxable?
While this info was accurate to the best of my knowledge as of the date of this post, keep in mind that sales tax laws are changed or refined all the time. For the latest updates to tax laws, always consult with a sales tax expert or your state’s department of revenue.
Alabama – Candy is taxable in Alabama
Arizona – Candy is considered a grocery item in Arizona and is non-taxable
Arkansas – Candy is taxable at the same rate as other grocery items in the state – a reduced Arkansas state rate of 1.5% + any local sales tax rate
California – Candy is non-taxable in California
Colorado – Candy is taxable in Colorado
Connecticut – Candy is taxable in Connecticut
Florida – Candy is taxable in Florida
Hawaii – Candy is taxable in Hawaii
Idaho – Candy is taxable in Idaho (as are grocery items)
Illinois – Candy is taxable in Illinois
Indiana – Candy is taxable Indiana
Iowa – Candy is taxable in Iowa
Kansas – Candy is taxable in Kansas
Kentucky – Candy is taxable in Kentucky
Louisiana – Candy is considered a grocery item and is non-taxable in Louisiana
Maine – Candy is taxable in Maine
Maryland – Candy is taxable in Maryland
Massachusetts – Candy is considered a “food product” and is non-taxable in Massachusetts
Michigan – Candy is considered a food item and is non-taxable in Michigan
Minnesota – Candy is taxable in Minnesota
Mississippi – Candy is taxable in Mississippi
Missouri – Candy is taxable in Missouri
Nebraska – Candy is non-taxable in Nebraska
Nevada – Candy is considered “food for human consumption” and is non-taxable in Nevada
New Jersey – Candy is taxable in New Jersey
New Mexico – Candy is non-taxable if sold at a “retail food store.” To qualify as a food store: “a retail store must either a.) stock and offer a variety of foods on a continuous basis in each of four staple food categories—two of which must be perishable foods; or b.) function as a specialty store attributing 50% or more of its gross retail sales to staple foods”
There is no explicit New Mexico law regarding retail stores. Though the law is a little cloudy here, it appears that candy would be taxable for eCommerce sellers with nexus in New Mexico.
New York – Candy is taxable in New York
North Carolina – Candy is taxable in North Carolina
North Dakota – Candy is taxable in North Dakota
Ohio – Candy is non-taxable in Ohio, unless it is sold for consumption on the premises where it is sold (which wouldn’t apply to eCommerce sellers).
Oklahoma – Candy is taxable in Oklahoma
Pennsylvania – Candy is non-taxable in Pennsylvania
Rhode Island – Candy is taxable in Rhode Island
South Carolina – Candy sold to be eaten “off the premises” is considered non-taxable from South Carolina state sales tax, but is still subject to local sales tax.
Example: You live in Union, SC and sell a chocolate heart to a buyer in Easley, SC where the total combined sales tax rate is 7%. While the chocolate heart isn’t subject to South Carolina’s 6% sales tax, it is subject to the 1% city of Easley sales tax rate. So you would charge your customer 1% sales tax on the item.
South Dakota – Candy is taxable in South Dakota
Tennessee – Candy is taxable in Tennessee
Texas – Candy is taxable in Texas. In June 2017, Texas clarified that nuts, raisins, and other fruits that have been coated with chocolate, yogurt, or caramel or have been candied, crystalized, or glazed are considered to be candy.
Utah – Candy in Utah is taxable at the same rate as grocery items. In Utah, grocery items are taxable, but taxed at a reduced rate of 1.75%. Though, if a transaction includes both food/ingredients and other taxable items of tangible personal property then the taxable rate is 4.65%.
Vermont – Candy is non-taxable in Vermont
Virginia – Candy is taxable in Virginia, but taxed at the same rate as food items. Food items are taxed at a reduced rate of 1.5% + a 1% local option tax in any applicable areas
Washington – Candy is non-taxable
Washington D.C. – Candy sold via the internet is non-taxable.
West Virginia – Candy is non-taxable in West Virginia
If the food item contains flour or requires refrigeration, it is not considered “candy” and should be taxed at the rate of other foods (either prepared or grocery items) in West Virginia.
Wisconsin – Candy is taxable in Wisconsin
Wyoming – Candy is non-taxable in Wyoming
A Couple of Exceptions to Candy Taxability
Are you a vending machine owner? Keep in mind that most states have special sales tax requirements for you.
Does the candy have flour as an ingredient or requires refrigeration? Your state may not consider that food item to be “candy,” and require a different sales tax rate.
Don’t want to keep up with changing sales tax laws and product taxability? Get started with TaxJar today and automate your sales tax!