In Colorado, are food supplements (vitamins, minerals), therapeutic medicines, and toiletries like soap and deodorant exempt from sales tax as 'food'?

Plain-English summary

A seller submitted a long list of products and asked, in general, whether food supplements, soaps, deodorants, and similar products are subject to Colorado sales tax. The Department treated it as a general information letter and gave the framework (a binding answer on the specific products would require a private letter ruling).

Colorado taxes sales of tangible personal property, but food is exempt unless it's served hot and not for home consumption (§ 39-26-102(4.5), § 39-26-707). To be exempt, a product must fall within the federal food stamp (SNAP) definition of food, 7 U.S.C. § 2012(g) — and the USDA's Food and Nutrition Service maintains lists of eligible and ineligible products. Applying that:

• Not exempt — food supplements / deficiency correctors: vitamins and minerals in any form (tablets, capsules, powders, liquids); cod liver oil (used mainly as a source of vitamins A and D); and other items used primarily for medicinal purposes or as health aids (Regulation (39)26-102.4.5).
• Not exempt — therapeutic products and medicines (unless prescribed): patent medicines and health aids/therapeutic agents such as aspirin, cough drops or syrups, cold remedies, and antacids — taxable unless prescribed by a practitioner of the healing arts.
• Exempt food: spices sold for food flavoring and teas containing rose hip qualify as exempt food products.
• Not exempt — toiletries: mouthwashes, deodorants, moisturizers, and similar products are taxable.

The Department stressed this was not a determination that the company's specific products qualify, and it noted the usual home-rule caveat (it doesn't administer self-collected home-rule city/county taxes; see DR 1002).

What this means for you

Sellers of supplements, OTC remedies, and personal-care products

Don't assume anything ingestible is exempt "food." Colorado anchors the food exemption to the SNAP definition, which excludes vitamins, minerals, and other supplements and excludes over-the-counter medicines. So your multivitamins, fish-oil/cod-liver-oil capsules, protein/health-aid powders, aspirin, cough syrup, cold and antacid products are generally taxable — and your soaps, mouthwash, deodorant, and moisturizers definitely are.

The narrow "yes" list

Genuine food ingredients stay exempt even if they sound health-oriented: culinary spices sold for flavoring and rose-hip teas are exempt food. The line is whether the item is food (for home consumption under SNAP) versus a supplement, medicine, or toiletry.

Prescriptions can change a medicine's treatment

An OTC therapeutic product becomes exempt when prescribed by a healing-arts practitioner. Absent a prescription, treat patent medicines and remedies as taxable.

Want certainty on your exact SKUs? Get a PLR

This letter is general guidance. Because eligibility turns on each product's SNAP classification, a business that wants a binding answer for its specific catalog should request a private letter ruling (and check the current USDA/SNAP eligibility lists).

Common questions

Q: Are vitamins and dietary supplements tax-free as food in Colorado? A: No. Supplements and deficiency correctors (vitamins, minerals, cod liver oil, health aids) are excluded from the food exemption and are taxable.

Q: What about over-the-counter medicine like aspirin or cough syrup? A: Taxable, unless prescribed by a practitioner of the healing arts. Patent medicines, cold remedies, and antacids are not exempt food.

Q: Is anything on the health-food shelf exempt?
A: Yes — true food items. Spices sold for flavoring and rose-hip teas qualify as exempt food. The question is always whether it's food under the SNAP definition.

Q: Are soap, mouthwash, and deodorant taxable?
A: Yes. Toiletries like mouthwash, deodorant, and moisturizers are not exempt food.

Q: Can I rely on this letter for my products?
A: No. It's a General Information Letter and explicitly not a determination on any specific product. For a binding answer, request a private letter ruling.

Citations and references

Statutes and regulations:

• § 39-26-104, C.R.S. — imposition of Colorado sales tax on tangible personal property
• § 39-26-102(4.5), C.R.S. — definition of "food"
• § 39-26-707, C.R.S. — food exemption
• 7 U.S.C. § 2012(g) — federal food stamp (SNAP) definition of food
• Department Regulation (39)26-102.4.5 — food supplements/deficiency correctors and OTC therapeutic products are not exempt food
• DR 1002 — list of state-administered vs. self-collected home-rule local jurisdictions

Related Colorado food letters:

• [[plr-25-004-sales-tax-exemption-for-items-sold-by-bakery]] — bakery goods as exempt food for home consumption

Source

• Landing page: https://tax.colorado.gov/sales-use-tax-letter-rulings
• Original PDF: https://tax.colorado.gov/sites/tax/files/documents/GIL-08-018.pdf

Original ruling text

Office of Tax Policy
P.O. Box 17087
Denver, CO 80217-0087
[email protected]

GIL-08-18
September 23, 2008
XXXXXXXXXXXX
Attn: XXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXX
Re: Inquiry re: sales and use taxes
Dear XXXXXXX,
The department reviewed your letter dated April 1, 2008. I apologize for the delay in responding to your request. The department recently acquired the staff needed to respond to these types of requests. The department also recently enacted a regulation governing requests for tax advice. See, §24-35-103.5, C.R.S. and Department regulation (24)-35103.5. Pursuant to this regulation, the department issues both private letter rulings and general information letters. Private letter rulings are issued in response to specific factual settings, are binding on the department, and require payment of a fee. General information letters are issued in response to general tax questions and are not binding on the department. You can view this regulation on-line at: http://www.revenue.state.co.us/taxstatutesregs/3921reg24-35-103.5.html You have submitted a lengthy request concerning the applicability of taxes to various products. I will initially treat this as a request for a general information letter. If you require additional information or request a determination with respect to your company specific products, such a request is appropriately handled as a private letter ruling. Issue

1. Are the sale of food supplements, soaps, deodorants, and other products subject to
   sales tax?
   Discussion
   In general, Colorado levies a sales tax on the sale of tangible personal property. §39-26-104, C.R.S. The sale of food is exempt from this tax unless it is served hot and is not for domestic home consumption. §39-26-102(4.5) and 707, C.R.S. In order to qualify as exempt food, the product must fall within the definition of food in the federal Food Stamp program, 7 U.S.C.
   §2012(g). The United States Department of Agriculture, Food and Nutrition Service, which administers the federal food stamp program, maintains a list of certain products which it has determined are either eligible or ineligible foods.

Food supplements or deficiency correctors are not exempt. See, Department regulation (39)26-102.4.5. These include such items as vitamins and minerals marketed in various forms, such as tablets, capsules, powders and liquids; products such as cod liver oil which is used primarily as a source of vitamins A and D; and other such items which are primarily used for medicinal purposes or as health aids. Similarly, therapeutic products and medicines (unless prescribed by a practitioner of the healing arts) are not exempt. These include patent medicines and other products used primarily as health aids and therapeutic agents, including aspirin, cough drops or syrups, cold remedies, and antacids. Spices sold for food flavoring and teas containing rose hip qualify as exempt food products. Mouth washes, deodorants, moisturizers and other similar products are not exempt. This response is not a determination that your company’s specific products qualify for an exemption. If you request a determination with respect to your company specific products, you must submit the request as a private letter ruling. Please note that the Department of Revenue administers state and state-collected city and county sales taxes and special district sales and use taxes, but does not administer sales and use taxes for self-collected home rule cities and counties. The department maintains a list of state administered local jurisdictions. See department publication DR 1002. The department has numerous resources to assist retailers with sales and use tax questions. These resources are easily accessed on the department’s web site at: www.revenue.state.co.us. Click on “Taxation” > “Publications / Resources” and select FYI’s, Regulations, or Tax Information Index. DR 1002 is found under “Forms.” You can also easily access an on-line “Sales Tax Information System” under “On-line Services” to find sales and use taxes for all cities, counties, and special districts in Colorado. Pursuant to state law, the Department will make public a redacted version of this letter. Your letter requesting this informational letter is not made public. See, §24-35-103.5(13), C.R.S. The regulation governing private letter rulings and informational letters is available on our web site at: http://www.revenue.state.co.us/taxstatutesregs/3921reg24-35-103.5.html I enclose a proposed redacted version of this letter. Please contact me within 60 days from the date of this letter if you have any questions, comments, or concerns about the redacted letter. Sincerely,

Office of Tax Policy
Colorado Department of Revenue

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