What Illinois sales tax rate applies to food, and does that rate apply to tobacco-free snuff-alternative products?

Plain-English summary

A tax research professional asked the Illinois Department of Revenue whether tobacco-free "snuff alternative" products -- items with no tobacco or nicotine that use food ingredients like coffee, herbs, or tea, some containing caffeine as an energy supplement -- are taxed as food when sold by a convenience store. Because the request didn't come from the actual taxpayer following the Department's Private Letter Ruling (PLR) procedure at 2 Ill. Adm. Code 1200.110, the Department could only respond with a General Information Letter (GIL), which points to the relevant rules rather than resolving the specific fact pattern.

The GIL first walks through the Tobacco Products Tax Act, explaining that the 36% wholesale tax (or $0.30/oz. for moist snuff) under 35 ILCS 143/10-10 falls on distributors of "tobacco products," and that this definition must be read broadly -- covering anything "prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise." Notably, the letter never states whether the requester's nicotine-free, non-tobacco products actually meet this definition; it simply summarizes how a distributor must analyze the question.

The letter then turns to the actual "Food" subject line: sales tax (Retailers' Occupation Tax and Use Tax, per 86 Ill. Adm. Code 130.101 and 150.101) applies to food sold at retail, but food, drugs, and medical appliances get a preferential low State rate of 1% (plus applicable local taxes) instead of the general rate. That 1% rate applies specifically to food "consumed off the premises where it is sold," excluding alcoholic beverages, candy, soft drinks, and food prepared for immediate consumption. "Food" is defined broadly at 86 Ill. Adm. Code 130.310(c)(1) as any solid, liquid, powder, or item intended primarily for human internal consumption -- expressly including condiments, spices, seasonings, vitamins, bottled water, and ice.

Finally, the letter explains the separate "candy" carve-out: candy (a sugar/honey/sweetener preparation combined with chocolate, fruit, nuts, or flavorings in bar/drop/piece form) is taxed at the general rate rather than the 1% food rate, but a product is NOT candy if it contains flour or requires refrigeration, per 86 Ill. Adm. Code 130.310(d)(7)(B)-(E). The letter does not apply these tests to the requester's specific snuff-alternative products -- it stops at describing the framework, consistent with a GIL's limited, non-binding, directional purpose under 2 Ill. Adm. Code 1200.120.

What this means for you

Convenience stores and retailers of novel snack/tobacco-adjacent products

If you sell a product that blends food ingredients (coffee, herbs, tea, caffeine) with a snuff-like format but contains no tobacco or nicotine, this letter does not tell you which tax rate applies. You'll need to work through the "tobacco product" definition (does it use tobacco leaf material and is it "suitable for chewing or smoking"?) and, if it's not a tobacco product, then work through the food/candy/prepared-food tests at 86 Ill. Adm. Code 130.310 yourself -- or request a binding PLR under 2 Ill. Adm. Code 1200.110 with your complete facts.

Grocers and food retailers generally

This letter is a useful plain-language recap of the food tax framework: off-premises food is 1% + local, but alcoholic beverages, candy, soft drinks, and food prepared for immediate consumption are excluded from that preferential rate. The candy definition's flour and refrigeration carve-outs are worth double-checking against your product ingredient lists, since a product otherwise matching "candy" (sweetener + chocolate/fruit/nuts in bar/drop/piece form) escapes candy treatment if it contains flour or needs refrigeration.

Accountants and tax professionals

Note the procedural point up front: a GIL is issued precisely because the requester (here, a "tax research professional" acting on behalf of an unnamed client) didn't follow the PLR request procedure, or the facts as presented weren't specific/complete enough to support a binding ruling. If you need something binding on the Department for a client's specific product, you must follow 2 Ill. Adm. Code 1200.110 and request a PLR in the client's own name.

Common questions

Q: What sales tax rate applies to food in Illinois?
A: Food sold at retail for consumption off the premises where sold is taxed at the low State rate of 1% plus applicable local taxes, per 86 Ill. Adm. Code 130.310. This excludes alcoholic beverages, candy, soft drinks, and food prepared for immediate consumption.

Q: Does this letter say whether tobacco-free snuff-alternative products are taxed as food or as tobacco products?
A: No. The letter describes the tobacco product definition and the food/candy definitions but does not apply either to the requester's specific products. It is a GIL, not a binding determination.

Q: How is "candy" different from "food" for tax rate purposes?
A: Candy is a sugar/honey/other-sweetener preparation combined with chocolate, fruit, nuts, or other ingredients/flavorings in bar, drop, or piece form. It does NOT include any preparation containing flour or requiring refrigeration -- those stay taxed as food even if they otherwise look like candy. See 86 Ill. Adm. Code 130.310(d)(7)(B)-(E).

Q: Why did the Department issue a GIL instead of a ruling my client could rely on?
A: The Department issues binding Private Letter Rulings (PLRs) only when a taxpayer follows the procedure in 2 Ill. Adm. Code 1200.110. Here, the nature of the inquiry and information provided led the Department to respond with a GIL instead, which per 2 Ill. Adm. Code 1200.120 is not a statement of Department policy and is not binding.

Q: What is the general definition of "food" for the 1% rate?
A: Any solid, liquid, powder, or item intended by the seller primarily for human internal consumption, whether simple, compound, or mixed -- including condiments, spices, seasonings, vitamins, bottled water, and ice. See 86 Ill. Adm. Code 130.310(c)(1).

Citations and references

• 86 Ill. Adm. Code 130.310 (tax rate applicable to sales of food; definitions of food and candy)
• 86 Ill. Adm. Code 130.310(c)(1) (definition of food)
• 86 Ill. Adm. Code 130.310(d)(7)(B)-(E) (factors distinguishing candy from food)
• 86 Ill. Adm. Code 130.101 (Retailers' Occupation Tax imposed on retail sales of tangible personal property)
• 86 Ill. Adm. Code 150.101 (Use Tax on tangible personal property purchased at retail)
• 35 ILCS 143/10-10 (tax on distributors of tobacco products)
• 2 Ill. Adm. Code 1200.110 (procedure for Private Letter Rulings)
• 2 Ill. Adm. Code 1200.120 (General Information Letters not binding on the Department)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2025.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2025/st25-0003-gil.pdf

Original ruling text

ST 25-0003-GIL 12/13/2024 FOOD
This letter discusses the State tax rate applicable to sales of food. See 86 Ill. Adm.
Code 130.310. (This is a GIL.)
December 13, 2024
NAME
COMPANY
EMAIL
Dear NAME:
This letter is in response to your email dated November 20, 2024, in which you
requested 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 https://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:
I’m a tax research professional looking for a private letter ruling on behalf of a
client.
We would like to get guidance on the taxability of tobacco alternative products
that do not contain tobacco or nicotine such as PRODUCT and PRODUCT1.
Some of these products have a nutrition facts panel and use food ingredients
(coffee, herbs, tea) but are intended to be snuff alternatives. Some of these
products contain some sort of energy supplement like caffeine. My client is a
convenience store.
Thank you in advance for your help!
DEPARTMENT’S RESPONSE:

COMPANY /NAME
Page 2
December 13, 2024
Tobacco Products
A tax is imposed on any person engaged in business as a distributor of tobacco
products at the rate of 36% of the wholesale price of tobacco products sold or otherwise
disposed of to retailers or consumers located in this State; except that, beginning on January
1, 2013, the tax on moist snuff shall be imposed at a rate of $0.30 per ounce, and a
proportionate tax at the like rate on all fractional parts of an ounce, sold or otherwise
disposed of to retailers or consumers located in this State. 35 ILCS 143/10-10. The impact
of the tax levied by this Act is imposed upon distributors engaged in the business of selling
tobacco products to retailers or consumers in this State.
“Tobacco products” means any cigars, including little cigars; cheroots;
stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other
smoking tobacco; snuff (including moist snuff) or snuff flour; cavendish; plug
and twist tobacco; fine-cut and other chewing tobaccos; shorts; refuse
scraps, clippings, cuttings, and sweeping of tobacco; and other kinds and
forms of tobacco, prepared in such manner as to be suitable for chewing or
smoking in a pipe or otherwise, or both for chewing and smoking; …
“Distributor” means any of the following:
(1)

Any manufacturer or wholesaler in this State engaged in the
business of selling tobacco products who sells, exchanges, or
distributes tobacco products to retailers or consumers in this
State.

(2)

Any manufacturer or wholesaler engaged in the business of
selling tobacco products from without this State who sells,
exchanges, distributes, ships, or transports tobacco products to
retailers or consumers located in this State, so long as that
manufacturer or wholesaler has or maintains within this State,
directly or by subsidiary, an office, sales house, or other place of
business, or any agent or other representative operating within
this State under the authority of the person or subsidiary,
irrespective of whether the place of business or agent or other
representative is located here permanently or temporarily.

(3) Any retailer who receives tobacco products on which the tax has
not been paid.

COMPANY /NAME
Page 3
December 13, 2024
The tax is imposed on the distributors of tobacco products, not the retailer or
consumer. At the time the distributor sells the tobacco product to a retailer or consumer,
the distributor must determine whether the product meets the definition of “tobacco
product”.
The definition of “tobacco products” identifies common types of products that are
generally considered to be included within the definition: cigars; various forms or types of
tobacco that are smoked, although the list is not all-inclusive; snuff; various forms of
chewing tobacco, although the list is not all-inclusive; miscellaneous forms of tobacco,
such as refuse or scraps; “and other kinds and forms of tobacco, prepared in such manner
as to be suitable for chewing or smoking in a pipe or otherwise”.
The definition must be construed broadly. Although it identifies specific types of
tobacco that are generally smoked or chewed, the definition explicitly includes “shorts;
refuse scraps, clippings, cuttings, and sweeping of tobacco”. The definition concludes by
including “other kinds and forms of tobacco, prepared in such manner as to be suitable for
chewing or smoking in a pipe or otherwise.” After reviewing the definition, the inescapable
conclusion is, if one can possibly smoke or chew the tobacco, the product is a “tobacco
product” and is subject to tax. This is the analysis the distributor must make because the
distributor is not in the position of knowing what the ultimate use of the product will be.
Retailers’ Occupation Tax
The Illinois Retailers’ Occupation Tax Act imposes a tax upon persons engaged in this
State in the business of selling tangible personal property at retail 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.
Food sold at retail in Illinois is subject to Retailers’ Occupation Tax and Use Tax.
Items that qualify as food, drugs and medical appliances are taxed at the low State rate of
1%. The Department’s regulation regarding the appropriate tax rates for food can be found
at 86 Ill. Adm. Code 130.310.
Food that is to be consumed off the premises where it is sold (other than alcoholic
beverages, candy, soft drinks, and food that has been prepared for immediate consumption)
is taxed at the rate of 1% plus applicable local taxes. Food is defined as any solid, liquid,
powder or item intended by the seller primarily for human internal consumption, whether
simple, compound, or mixed, including foods such as condiments, spices, seasonings,
vitamins, bottled water, and ice. 86 Ill. Adm. Code. 130.310(c)(1).

COMPANY /NAME
Page 4
December 13, 2024
“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.
To determine whether an item meets the definition of “candy”, it must be analyzed
using the factors listed below:
B)

Flour: Products whose ingredient list contain the word “flour”,
regardless of the type of flour (e.g., wheat, rice) are not candy. . . .

C)

Refrigeration: Items that require refrigeration are not considered to be
candy. . . .

D)

Sweeteners: Candy is limited to products that contain sugar, honey, or
other natural or artificial sweeteners. . . .

E)

Bars, drops or pieces: Items must be in the form of bars, drops or
pieces to be considered candy.
86 Ill. Adm. Code 130.310(d)(7)(B) through (E).
The regulation goes on to provide examples of items that are not considered candy because
they do not meet the requirements of subsections (d)(7)(B) through (E).
I hope this information is helpful. If you require additional information, please visit
our website at https://tax.illinois.gov/ or contact the Department’s Taxpayer Information
Division at 800-732-8866.
Very truly yours,
Kimberly Rossini
Associate Counsel
KAR:slc