Were chocolate-fruit and fruit-honey bars taxed as candy or low-rate food in Illinois?

Plain-English summary

A seller submitted labels for a chocolate-and-fruit bar and a fruit-and-honey bar and asked IDOR to determine their taxability.

IDOR gave the general food and candy rules but did not expressly classify either product. Food for human consumption sold for off-premises use was taxed at the 1% State rate, except for alcoholic beverages, soft drinks, candy, and food prepared for immediate consumption. Those exceptions were taxed at the general 6.25% State rate, plus applicable local tax.

Candy was a sweetened preparation combined with chocolate, fruit, nuts, or other ingredients or flavorings in bars, drops, or pieces. A product containing flour or requiring refrigeration was not candy even when it otherwise fit the definition.

What this means for you

Snack-bar sellers should check ingredients and storage requirements. The product name or "whole food" category does not replace the flour and refrigeration tests in Section 130.310.

Common questions

Did IDOR say these exact bars were candy? No express conclusion appears in the response.

What State rate applied to candy? 6.25%.

What took a product outside the candy definition? Containing flour or requiring refrigeration.

Citations and references

• 86 Ill. Adm. Code 130.310.

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2016.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2016/st-16-0011-gil.pdf

Original ruling text

ST 16-0011-GIL 03/24/2016

FOOD

This letter discusses the applicable sales tax rates for food and candy. See 86 Ill. Adm. Code
130.310. (This is a GIL.)

March 24, 2016
Dear Xxxxx:
This letter is in response to your letter dated February 23, 2016, in which you request
information. The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are
issued by the Department in response to specific taxpayer inquiries concerning the application of a
tax statute or rule to a particular fact situation. A PLR is binding on the Department, but only as to the
taxpayer who is the subject of the request for ruling and only to the extent the facts recited in the PLR
are correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in
the Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information
Letter (“GIL”) is to direct taxpayers to Department regulations or other sources of information
regarding the topic about which they have inquired. A GIL is not a statement of Department policy
and is not binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website
at www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to
your inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
Please review the enclosed product labels for each item listed below, and provide us
with a determination of sales taxability in your state. Please note that these products
are categorized as whole foods.
Products:

BAR-CHOCOLATE + FRUIT
BAR-FRUIT+ HONEY

Thank you for your prompt attention to this request. I will be happy to provide additional
information if needed.
We appreciate your assistance in this matter.

DEPARTMENT’S RESPONSE:
The Illinois Retailers' Occupation Tax Act imposes a tax upon persons engaged in this State in
the business of selling tangible personal property to purchasers for use or consumption. See 86 Ill.
Adm. Code 130.101. In Illinois, Use Tax is imposed on the privilege of using, in this State, any kind of
tangible personal property that is purchased anywhere at retail from a retailer. See 86 Ill. Adm. Code
150.101. These taxes comprise what is commonly known as “sales” tax in Illinois. If the purchases
occur in Illinois, the purchasers must pay the Use Tax to the retailer at the time of purchase. The
retailers are then allowed to retain the amount of Use Tax paid to reimburse themselves for their
Retailers' Occupation Tax liability incurred on those sales.

In the case of food that is sold for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages, soft drinks, candy and food that has been
prepared for immediate consumption), the tax is imposed at the low State rate of 1%, plus any
applicable local taxes. Food that is prepared for immediate consumption, as well as candy, alcoholic
beverages and soft drinks, is taxed at the general State rate of 6.25%, plus any applicable local
taxes. For further information on the taxability of food, please see 86 Ill. Adm. Code 130.310. Food
that is to be consumed off the premises where it is sold includes food sold from a vending machine,
except soft drinks, candy, and food products that are dispensed hot from a vending machine.
As pointed out above, candy is taxable at the 6.25% general merchandise rate. Candy is
defined as a preparation of sugar, honey, or other natural or artificial sweeteners in combination with
chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops, or pieces. Candy
does not include any preparation that contains flour or requires refrigeration. Thus, if a product
contains flour or requires refrigeration, it would not be considered “candy” even if it meets all the other
elements of the definition
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.

Very truly yours,

Debra M. Boggess
Associate Counsel

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