Are sales of dietary supplements subject to Colorado sales tax, or do they qualify for the food exemption?

Plain-English summary

A company asked whether its product — which it describes as a dietary supplement — is subject to Colorado sales tax. The Department's guidance: dietary supplements are taxable. They do not qualify for Colorado's food exemption.

The food-exemption test. Colorado taxes sales of tangible personal property (§ 39-26-104) but exempts food (§§ 39-26-102(4.5), 707). To be exempt, a product must fall within the federal definition of food — the Food Stamp/SNAP program (7 U.S.C. § 2012(g)), or WIC supplemental foods (42 U.S.C. § 1786(b)(11)) when purchased with WIC funds. The USDA's Food and Nutrition Service maintains lists of eligible and ineligible items.

Supplements, vitamins, and health aids are excluded. The Department's regulation (39)26-102.4.5 states that food or dietary supplements or "deficiency correctors" are not exempt. These include:
- Vitamins and minerals marketed as tablets, capsules, powders, or liquids;
- Products like cod liver oil used primarily as a source of vitamins; and
- Other items primarily used for medicinal purposes or as health aids.

Therapeutic products and OTC medicines too. Patent medicines and products used primarily as health aids or therapeutic agents — aspirin, cough drops or syrups, cold remedies, antacids — are not exempt unless prescribed by a practitioner of the healing arts.

What stays exempt. By contrast, spices sold for food flavoring and teas containing rose hip qualify as exempt food. Since the company described its product as a dietary supplement, it falls on the taxable side of the line.

(Reminder: the Department administers state and state-collected local taxes but not self-collected home-rule city/county taxes — check DR 1002 for those jurisdictions.)

What this means for you

Supplement, vitamin, and natural-health retailers

Treat dietary supplements, vitamins/minerals, and health aids as taxable in Colorado, regardless of tablet/capsule/powder/liquid form. The food exemption is tied to the federal SNAP/WIC definition, which excludes supplements — so "it's ingestible" or "it's natural" doesn't make it exempt.

Pharmacies and grocery/health stores

Watch the dividing line: groceries/food (SNAP-eligible) are exempt, but OTC medicines and health aids (aspirin, cough/cold products, antacids) are taxable unless prescribed. Items like food-flavoring spices and rose-hip teas stay on the exempt food side.

Accountants and tax professionals

The controlling test is the federal SNAP/WIC food definition plus Reg. (39)26-102.4.5's explicit exclusion of supplements/health aids. A product's marketing as a "dietary supplement" (Supplement Facts vs. Nutrition Facts labeling) typically lands it in the taxable category — see the label-driven analysis in PLR 11-008.

Common questions

Q: Are dietary supplements taxed in Colorado?
A: Yes. They don't meet the federal SNAP/WIC food definition Colorado uses for the food exemption, and the Department's regulation expressly excludes supplements, vitamins, and health aids.

Q: What about vitamins in liquid or powder form?
A: Still taxable. Form (tablet, capsule, powder, liquid) doesn't matter — vitamins and minerals marketed as supplements are excluded from exempt food.

Q: Are any of these health products exempt?
A: Therapeutic products/medicines are exempt only if prescribed by a practitioner. Spices for food flavoring and rose-hip teas qualify as exempt food.

Citations and references

Statutes, rules, and publications:
- § 39-26-104, C.R.S. (sales tax); §§ 39-26-102(4.5), 707, C.R.S. (food exemption)
- 7 U.S.C. § 2012(g) (SNAP/Food Stamp food definition); 42 U.S.C. § 1786(b)(11) (WIC supplemental foods)
- Reg. (39)26-102.4.5 (dietary supplements, vitamins, health aids not exempt); DR 1002 (state-administered vs. home-rule jurisdictions)

Related rulings

• [[plr-11-008-private-letter-ruling]] — Supplement Facts vs. Nutrition Facts label controls food vs. supplement
• [[gil-13-017-seeds-and-plants-food-and-dietary-supplements-medical-supplies-test-ki]] — food vs. dietary-supplement vs. medical lines
• [[gil-13-028-bagged-or-packaged-salads]] — applying the SNAP/WIC food definition

Source

• Landing page: https://tax.colorado.gov/sales-use-tax-letter-rulings
• Original PDF: https://tax.colorado.gov/sites/tax/files/documents/GIL-09-015.pdf

Original ruling text

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

GIL-09-015
July 7, 2009
XXXXXXXXXXXXX
Attn: XXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXX
Re: dietary supplements
Dear XXXXXXXXXXXXX,
This letter is in response to the letter you submitted on behalf of XXXXX (“Company”) regarding
the taxability of XXXXXX and in which you request a letter ruling or binding opinion.
The Department issues general information letters and private letter rulings. A general
information letter provides a general overview of the applicable tax law, does not provide a
specific determination, and is not binding on the department. A private letter ruling is a
determination of the applicability of tax to a specific set of circumstances and is binding in the
department. A party requesting a private letter ruling must provide certain information and
remit a fee. For more information about general information letters and private letter rulings,
please refer to the Department’s regulation 24-35-103.5, C.R.S., which is available on our web
site at: www.colorado.gov/revenue/tax.
Although you request a ruling or binding opinion, I will initially treat your request as one for a
general information letter because the request does not contain the information or fee
necessary for a private letter ruling. You may resubmit this request as a request for a private
letter ruling.
Issue
Are the sales of dietary supplements 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, except under certain circumstances not
relevant here. §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) or supplemental foods as defined in 42 U.S.C. §1786(b)(11) if purchased with funds
provided by the federal Supplemental Food and Nutrition Program for Women, Infants, and
Children (“WIC Program”)). The United States Department of Agriculture, Food and Nutrition

Service, which administers the federal food stamp program, maintains a list of certain products
that it has determined are either eligible or ineligible foods.
Food or dietary 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. We note that the
Company describes XXXXXXXX as a dietary supplement.
Miscellaneous
Please note that the department 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 stateadministered local jurisdictions as well as self-collect home-rule cities and counties. 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.taxcolorado.org.
Click on “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.
Enclosed is a redacted version of this ruling. Pursuant to statute and regulation, this redacted
version of the ruling will be made public within 60 days of the date of this letter. Please let me
know in writing within that 60 day period whether you have any suggestions or concerns about
this redacted version of the ruling.

Sincerely,

Office of Tax Policy
Colorado Department of Revenue

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