Taxability of Dietary Supplements in Missouri
- Jan 8, 2016 | Gail Cole
Under Missouri law, retail sales of “food and food products” purchased for home are subject to a reduced rate of tax of 1%. The question is, what qualifies as food and food products?
- Any food or food product for home consumption except alcoholic beverages, tobacco, hot foods or hot food products ready for immediate consumption (except in certain situations).
- Seeds and plants for use in gardens to produce food for the personal consumption of the eligible household.
Missouri law also includes in the definition of food “food dispensed by or through vending machines.”
As anyone who has shopped for sustenance in this country knows, there is a dizzying array of products — some of which are not obviously food. Sellers invariably have questions from time to time.
The Missouri Department of Revenue recently answered such questions in a letter ruling (LR 7673). A seller of dietary supplements wished to know if the products were subject to Missouri sales or use tax and, if so, if any products were eligible for the reduced food sales or use tax rate.
Dietary supplements are subject to sales or use tax under RSMo, Section 144.020.1. The dietary supplements in question do not qualify for an exemption under RSMo 144.030.2(19) (for prescribed products and certain over-the-counter or nonprescription drugs).
Dietary supplements containing a nutritional facts label are subject to Missouri’s 1% reduced sales/use tax rate for food under Section 144.014.1 RSMo.
However, dietary supplements containing only a supplemental facts label (and not a nutritional facts label) are not subject to the reduced rate.
Letter rulings can be instructive but they are binding only with respect to the applicant and only for a period of 3 years.