12 Sales Tax Tips for Small Businesses: #7, Product Taxability
- Sales and Use Tax
- January 8, 2012 | Will Frei
Make sure you understand the taxability of new product offerings
Offering a new product in 2012? What are the taxability laws? Identify the unique laws in each jurisdiction where you have nexus and plan to sell your new product.
Indiana made changes to its food taxability law this year. The state bulletin describing the changes notes that "generally, the sale of food ingredients for human consumption is exempt from Indiana sales tax." However, the definition of "food" excludes tobacco, alcoholic beverages, candy, dietary supplements and soft drinks.
Taxable items include:
- Cake decorations
- Cracker Jacks
- Flaked coconut with sweetener
- Gluten-free candy products
- Toothpaste and mouthwash
Determining which items are taxable can prove difficult. For instance, marshmallows are taxable but marshmallow crème is exempt.
For more information:
- An informative commentary about intricacies of food taxability in Indiana.
- A full list of taxable and non-taxable food items in Indiana.