Which sports drinks, protein products, supplements, meal replacements, shakes, and nutrition bars were taxable at a Florida fitness facility?

Subject

Sports Drinks, Fitness Supplements, and Nutritional Snacks

Plain-English summary

The Department reached different results for different products based on labeling, ingredients, form, and where preparation occurred. The fitness and nutrition facility also offered exercise, tanning, and training services, but the ruling addressed its retail nutrition products.

The facility's lack of a restaurant license did not make the on-site shake exempt. The statute separately excluded food or drinks prepared on the seller's premises for immediate consumption.

What this means for you

Under the labeling and food rules applied in 1997, product names and package language could control the outcome. A bottled beverage labeled as a drink was taxable even when marketed for energy, protein, weight gain, or fitness.

Preparation and format also mattered. The same protein powder could be exempt when sold for mixing at home while a shake made from it on the seller's premises was taxable.

Common questions

Q: Were all protein products exempt? No. The ruling exempted specified supplements and powders, but taxed ready-to-drink products labeled as drinks and sweetened bar products treated like candy.

Q: Why were nutrition bars taxable despite vitamins and minerals? Their sweeteners and candy-like form placed them in the rule's category for items similar to candy.

Q: Were meal-replacement powders taxable? No. The listed formulas were exempt as special dietary foods.

Q: Did preparing the shake on site change the result? Yes. The juice-bar shake was taxable because the seller prepared it for immediate consumption.

Citations and references

• Fla. Stat. § 212.06(1)(a) — collection of tax on taxable retail sales and use
• Fla. Stat. § 212.08(1)(a) — food and drink exemption and exclusions for soft drinks and on-premises preparation
• Fla. Admin. Code R. 12A-1.011(1)(a)10., (1)(a)1.a., (1)(b), and (1)(c) — drinks, candy-like products, dietary foods, and supplements
• 21 C.F.R. §§ 102.30, 102.32, 102.33, and 165.75 — labeling provisions referenced by the soft-drink rule
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-019

Original ruling text

SUMMARY

The following products are sold by a Taxpayer who operates a fitness and nutrition facility:

1) Fluid replacement drinks sold "ready-to-drink" in bottles or cans are taxable since the word "drink" or "ade" appears on the product label. Rule 12A-1.011(1)(a)10.b., F.A.C.

2) Milk based protein supplements are not taxable since they are a supplement to food. Rule 12A-1.011(1)(b), F.A.C.

3) Protein powder intended to be mixed with milk is not taxable. Rule 12A-1.011(1)(a)10.c., F.A.C.

4) Fitness shakes prepared on the Taxpayer's premises ready for immediate consumption are taxable since they are prepared on the seller's premises. Section 212.08(1)(a)4., F.S.

5) Multi-vitamins and minerals are exempt as food or food supplements. Rule 12A-1.011(1)(c), F.A.C.

6) Meal replacement formulas are exempt as a special dietary food. Rule 12A-1.011(1)(b), F.A.C.

7) Nutrition bars, sweetened with natural or artificial sweeteners are taxable as "items similar to candy". Rule 12A-1.011(1)(a)1.a., F.A.C.

Mar 20, 1997

Re: Technical Assistance Advisement 97A-019 Sales and Use Tax - Sports Drinks, Fitness Supplements, and Nutritional Snacks Section: 212.08, F.S.

Rule :

12A-1.011, F.A.C.

Petitioner: XXX (Taxpayer)

Dear :

This is a response to your petition received December 2, 1996, for the Department's issuance of a Technical Assistance Advisement ("TAA") concerning the above referenced party and matter. Your petition has been carefully examined and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S.

DISCUSSION OF FACTS

As provided in your letter, the Taxpayer owns and operates a full fitness and nutrition facility. You have listed a variety of services offered by the Taxpayer which include, among other things, weight training, aerobic exercise, tanning, and personal training. In addition to these services, the Taxpayer sells fluid replacement drinks, weight training drinks, juice bar shakes, fitness supplements, and nutritional snack bars. The Taxpayer is not licensed with the Division of Hotels and Restaurants of the Department of Business and Professional Regulation.

You have provided a list of products, along with the corresponding product label, for which you seek confirmation regarding the taxability thereof. For the sake of convenience, we have separated the products into three categories.

Category I. Fluid Replacement and Weight Training Drinks (Sports Drinks).

1. Carbo Light Natural Energy Drink
2. Bulk Force -750- Weight Gain Drink
3. Blue Thunder Power Activator Drink
4. High Voltage Protein Drink
5. Critical Mass Drink
6. Maximum Fat Burner Fat Metabolizing Thirst Quenching

Drink

7. Hyper-Thermogenic Ripped Force Drink
8. Carbo Force Natural Energy Drink
9. Zero Tea Drink
10. Amino Force - The Ultimate Training Drink
11. Super Tea Natural Energy Drink
12. Cutting Force-Fat Burning Formula Drink
13. Ultra Fuel Drink
14. Powerade
15. Hi-Protein Super Shake
16. Formula 80 Protein Powder
17. Juice Bar Shake

Items 1 through 15 are sold ready-to-drink in bottles or cans. Item number 16 is a concentrated protein powder intended to be mixed with milk. Item number 17 is a ready-to-drink shake prepared on the Taxpayer's premises for immediate consumption.

DEPARTMENT RESPONSE TO CATEGORY I

As provided in Section 212.06(1)(a), F.S., sales tax shall be collectible from all dealers on the sale at retail, the use, the consumption, the distribution, and the storage for use or consumption in this state of tangible personal property or services taxable under this part. Section 212.08(1)(a), F.S., exempts the sale of certain food and drinks for human consumption.

Section 212.08(1)(a), F.S., provides in pertinent part that none of the exempt items means:

1. Food or drinks served, prepared, or sold in or by
   restaurants; drugstores; lunch counters; cafeterias; hotels; amusement parks; racetracks; taverns; concession stands at arenas, auditoriums, carnivals, fairs, stadiums, theaters, or other like places of business; or by any business or place required by law to be licensed by the Division of Hotels and Restaurants of the Department of Business and Professional Regulation,...;

2. Foods and drinks sold ready for immediate consumption

from vending machines, pushcarts, motor vehicles, or any other form of vehicle;

3. Soft drinks, which include, but are not limited to, any
   nonalcoholic beverage, any preparation or beverage commonly referred to as a `soft drink,' or any noncarbonated drink made from milk derivatives or tea, when sold in can or similar containers...

4. Foods or drinks cooked or prepared on the seller's
   premises and sold ready for immediate consumption either on or off the premises, excluding bakery products for offpremises consumption unless such foods are taxed under subparagraph 1. or subparagraph 2.;....

As stated in Rule 12A-1.011(1)(a)10.b., F.A.C.:

All preparations, beverages and drinks in any physical form whatsoever are deemed soft drinks' and taxable if the word(s)drink', ade', orbeverage' precedes or follows the name or if such word(s) appear on the label, or such word(s) are required in the description of the contents under the provisions of the Federal Food, Drug and Cosmetic Act, 52 Stat. 1040 (1938), as amended, and as found in 21 CFR 102.30, 102.32, 102.33, 165.75 (1980).

Since the word "drink" or "ade" appears on the product labels of items 1 through 14, these products come within the definition of a "soft drink" and are taxable.

Item number 15 is a milk based protein supplement used as a food supplement and is not taxable. As provided in Rule 12A1.011(1)(b), F.A.C., special dietary foods and fortified milk products are considered food by the Florida Food, Drug and Cosmetic Law, and the Florida Department of Agriculture and Consumer Services, and are exempt.

Since item number 16 is a product intended to be mixed with milk, it is not taxable. As provided in Rule 12A1.011(1)(a)10.c., F.A.C., the term "soft drink" does not include natural fluid milk, homogenized milk, pasteurized milk, whole

milk, chocolate milk, buttermilk, half and half, whipping cream, condensed milk, evaporated milk, powdered milk, or similar milk products or products intended to be mixed with milk.

Item number 17 is a mixture of Formula 80 Protein Powder, fruit, ice, and milk. Since it is prepared on the seller's premises for immediate consumption, it does not qualify for the exemption granted by Section 212.08(1), F.S., and sales tax should be collected on the sale of this product.

Category II. APEX Fitness Supplements.

1. Lifetime Multi-Vitamin and Mineral Formula
2. BCAA (Branched Chain Amino Acids)
3. Protein 1000
4. Lipotropic & Transport Formula
5. Max-Workout
6. Chromemate
7. Balance Anti-oxidant Formula
8. Creatine/Glutamine Complex
9. Thermo Transport Formula
10. C-1000
11. Cal-Lite (Meal Replacement Formula)
12. High Performance Meal Replacement Formula
13. LBM Gainer (Meal Replacement Formula)
14. 100% Egg Protein

For each of the products listed above, you have provided an excerpt from the Apex system booklet which describes the product and its recommended usage. Items 1 through 10 are multivitamins, minerals, proteins, and other similar products specifically marketed and designed for use by athletes. Items 11 through 13, as the name indicates, are meal replacement formulas sold in a powdered form to be mixed with water, milk, or juice. Item number 14 is sold in a powdered form to be mixed and/or cooked with fluid or food.

DEPARTMENT RESPONSE TO CATEGORY II

Items 1 through 10 are exempt pursuant to Rule 12A-1.011(1)(c), F.A.C., which provides that non-prescription vitamins and

minerals are exempt as food or food supplements.

Since items 11 through 13 are used as a meal replacement, they are exempt as a special dietary food pursuant to Rule 12A1.011(1)(b), F.A.C.

Item 14, a mixture of egg white solids, natural flavor, and preservatives, is exempt as a food item pursuant to Rule 12A1.011(1)(a), F.A.C., which provides that eggs and egg products are not taxable.

Category III. Nutrition Bars.

1. Hi-Protein Steel Bar
2. Balance - The Complete Nutritional Food Bar
3. Super Heavyweight Bar
4. Apex Fitness Nutrition Bar
5. Power Bar
6. Granola Bar
7. Fruit Booster Bar
8. Nutri-Grain Bar

You have enclosed product labels for items 1 through 5. These products are similar to candy bars except for the fact that they contain high amounts of vitamins and minerals and are marketed for use by athletes and body builders. All of the products (1 through 5) contain one or more of the following sweeteners: high fructose syrup, corn syrup, honey, or fructose.

DEPARTMENT RESPONSE TO CATEGORY III

The exemption granted by Section 212.08(1)(a), F.S., applies only to certain food and drinks and not to candy. As provided in Rule 12A-1.011(1)(a)1.a., F.A.C., granola bars, chocolatecoated or candy-coated peanuts, chocolate-coated or candy-coated pretzels, chocolate-coated or candy-coated cookies, candied fruit, crystallized fruit, glazed fruits, and other preparations of fruits, nuts or other ingredients in combination with chocolate, sugar, honey, or other natural or artificial sweeteners are considered items similar to candy and are taxable, unless they are the type primarily intended and

normally sold for cooking purposes.

Items 1 through 5 are considered items similar to candy and are taxable pursuant to Rule 12A-1.011(1)(a)1.a., F.A.C., since they are prepared with natural or artificial sweeteners.

Items 6 through 8 are similar to granola bars and are also taxable.

This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on the department only under the facts and circumstances described in the request for this advice, as specified in s. 213.22, F.S. Our response is predicated upon those facts and the specific situation summarized above. You are advised that subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this advice is based may subject similar future transactions to a different treatment from that which is expressed in this response.

You are further advised that this response and your request are public records under Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s. 213.22, F.S. Your name, address, and any other details that might lead to identification of the taxpayer must be deleted by the Department before disclosure. In an effort to protect the confidentiality of such information, we request you notify the undersigned in writing within 15 days of any deletions you wish made to the request or this response.

Sincerely,

Richard R. Parsons
Tax Law Specialist
Tax Policy and Dispute Resolution
(904) 922-4838