How does Georgia sales tax apply to prepackaged meal replacements and vitamin supplements labeled with Nutrition Facts or Supplement Facts?

Plain-English summary

The product label determined the tax treatment in the Department's final ruling. Prepackaged meal replacements carrying a Nutrition Facts panel were food and food ingredients sold for off-premises consumption. They were exempt from state sales tax but remained subject to local sales tax.

Products carrying a Supplement Facts panel were dietary supplements rather than exempt food. Their sales were subject to both state and local sales tax. The meal replacements were not prepared food because the seller did not heat, mix, or provide utensils with them.

Common questions

Q: Were all products in the fat-loss program taxed the same way?

A: No. Nutrition Facts products received the state food exemption; Supplement Facts products did not.

Q: Did the food exemption eliminate local sales tax?

A: No. The ruling expressly kept local tax on qualifying food products.

Citations and references

• O.C.G.A. § 48-8-3(57) -- state food exemption
• O.C.G.A. § 48-8-2(11.1), (16), (27)(A) -- dietary supplement, food, and prepared food
• 21 C.F.R. § 101.36 -- Supplement Facts labeling

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2014-18

Original ruling text

Date Issued:
November 12, 2014
Georgia Letter Ruling:
LR SUT-2014-18
Topic: Food

This letter is in response to your request for guidance on the application of Georgia sales and use tax to sales of meal
replacement items and vitamin supplements.
Facts
Taxpayer sells meal replacement products and vitamin supplements as part of a fat loss program that includes
prepackaged foods for breakfast, lunch, and one snack during the day. Meal replacement products have adequate
protein to replace meals and come in numerous forms. The products are sold ready to eat, or prepared via the
microwave, adding water and shaking, or boiling.
The vitamin supplements include calcium/magnesium, potassium, multivitamin, omega 3 anti-oxidants, and
digestive enzymes. Taxpayer does not mix or heat food or supplements at any time prior to retail sale. All products
are sold for off premises human consumption.
Issues

1. Are meal replacements described above subject to Georgia sales and use tax?
2. Are vitamin supplements described above subject to Georgia sales and use tax?
   Analysis
   O.C.G.A. § 48-8-3(57) exempts “food and food ingredients” from state (but not local) sales and use tax when such
   items are sold to individual consumers for off-premises human consumption. 1 “Food and food ingredients” means
   substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or
   chewing by humans and are consumed for their taste or nutritional value. 2 “Food and food ingredients” does not
   include alcoholic beverages, dietary supplements, or tobacco. For purposes of the exemption in Code Section 48-83(57), “food and food ingredients” also does not include prepared food.
   “Prepared food” generally means food:
   1.
   2.
   3.

Sold in a heated state or heated by the seller;
With two or more food ingredients mixed or combined by the seller for sale as a single item;
or
Sold with eating utensils provided by the seller, including plates, knives, forks, spoons,
glasses, cups, napkins, or straws. A plate does not include a container or packaging used to
transport the food.3

If Taxpayer purchases the items at issue and resells the items, such items do not satisfy the definition of “prepared
food” quoted above. In such a case, Taxpayer would simply be a reseller of prepackaged items. The prepackaged
items would not be sold in a heated state or heated at any time by the seller; the items are not comprised of two or
more ingredients mixed or combined by the seller; and the items would not be sold with eating utensils.
As mentioned above, “food and food ingredients” also does not include dietary supplements. “Dietary supplement”
means any product, other than tobacco, intended to supplement the diet that:

1

O.C.G.A. § 48-8-3(57).
O.C.G.A. § 48-8-2(16).
3
O.C.G.A. § 48-8-2(27) (A).
2

November 12, 2014
LR SUT-2014-18
Food
Page 2 of 3

1.

2.

3.

Contains one or more of the following dietary ingredients: a vitamin, mineral, herb or other
botanical, amino acid, a dietary substance for use by humans to supplement the diet by
increasing the total dietary intake, or a concentrate, metabolite, constituent, extract, or
combination of any ingredient described above; and
Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not
intended for ingestion in such a form, is not represented as conventional food and is not
represented for use as a sole item of a meal or of the diet; and
Is required to be labeled as a dietary supplement, identifiable by the "Supplemental Facts" box
found on the label as required pursuant to 21 C.F.R. § 101.36. 4

“Conventional foods are foods that are not dietary supplements . . . Dietary supplements must be labeled as such
and must not be represented for use as a conventional food or as the sole item of a meal or the diet. One way to
distinguish dietary supplements from conventional foods is by looking at the nutrition information on the label of the
product. Conventional foods must have a "Nutrition Facts" panel on their labels, but dietary supplements must have
a "Supplement Facts" panel.”
In the present case, products properly labeled with a “Nutrition Facts” box as required by the Code of Federal
Regulations are “food and food ingredients”, and are subject to state sales tax but not local sales tax when sold to
individual consumers for off-premises human consumption. However, products that are properly labeled with a
“Supplement Facts” box as required by the Code of Federal Regulations do not fall within the scope of “food and
food ingredients” and are subject to both state sales tax and local sales tax.
Rulings
Taxpayer’s sales of products that are properly labeled with a “Nutrition Facts” box are exempt from state sales tax,
but not local sales tax, when sold to individual consumers for off-premises human consumption, when the products
fall within the scope of the “food and food ingredients” state sales tax exemption. Taxpayer’s sales of products that
are properly labeled with a “Supplement Facts” box do not fall within the scope of the “food and food ingredients”
state sales tax exemption and are, thus, subject to both state and local sales tax.
1.

Products properly labeled with a “Nutrition Facts” box are exempt from state sales tax, but not local sales tax,
when sold to individual consumers for off-premises human consumption.

2.

Products properly labeled with a “Supplement Facts” box are fully subject to both state sales tax and local sales
tax.

The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances, and taxpayer in question. Should the circumstances regarding the
transactions change, or differ materially from those represented, then this ruling may become invalid. In addition,
please be 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 tax treatment than that
expressed in this response.

4

O.C.G.A. § 48-8-2(11.1).

November 12, 2014
LR SUT-2014-18
Food
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