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12 Sales Tax Tips for Small Businesses: #7, Product Taxability


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.

case study

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
  • Marshmallows

Determining which items are taxable can prove difficult. For instance, marshmallows are taxable but marshmallow crème is exempt.

For more information:

 

 


Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei directs social media and blogging for @avalara. He is on a mission to help make sales tax less taxing for businesses of all kinds.