Are health food products and herbal supplements subject to Kansas sales and use tax?

Plain-English summary

A company registered to report Kansas sales and use tax added a line of health food products and herbal supplements and asked whether they are taxable. The Department ruled that they are subject to Kansas sales and use tax.

The products were "health food products or herbal supplements," including "caplets that contain extracts of beets, carrots, and barley; aloe vera juice; pollen extract supplement; trace mineral supplements; dried barley juice; coenzyme Q10 supplements, freshwater clam extract; cranberry juice; an herbal diet supplement; carrot juice powder; an antioxidant supplement, a powdered fiber dietary supplement, and various other supplements of a similar nature."

The Department contrasted Kansas with other states: "As you know, other states that exempt food sales exempt the sale of many of your products. Unlike these states, Kansas imposes sales tax on retail sales of food and food products. Similarly, Kansas imposes sales tax on retail sales of over-the-counter medicines. We only exempt sales of prescription drugs. Accordingly, there are no Kansas exemptions that apply to exempt the retail sale of your products." It added that "a number of other opinion letters . . . reach a similar conclusion about the taxability of retail sales of herbal supplements."

What this means for you

Retailers of supplements and health foods

Sales of health food products, herbal supplements, vitamins, and similar items are taxable in Kansas. Collect Kansas sales tax (or accrue use tax) on them just as you would on other food and over-the-counter products.

Why "food" doesn't help you in Kansas

In 2000 Kansas taxed retail sales of food and food products, so being classified as a "food" or "dietary" item did not create an exemption — the opposite of many other states. Over-the-counter medicines were taxed as well.

The only exemption is prescription drugs

Kansas exempted only prescription drugs. Unless a product is dispensed on a prescription, expect it to be taxable.

Common questions

Q: Are herbal supplements and vitamins taxable in Kansas?
A: Yes. The Department ruled that health food products and herbal supplements are subject to Kansas sales and use tax, with no applicable exemption.

Q: Doesn't Kansas exempt food?
A: Not in 2000 for these purposes. The Department said "Kansas imposes sales tax on retail sales of food and food products," unlike states that exempt food — so calling a product "food" did not exempt it.

Q: What health-related products are exempt?
A: Only prescription drugs. Over-the-counter medicines and supplements are taxable.

Citations and references

• The Department did not cite a specific statute number. It relied on the general Kansas rules that retail sales of food and food products and of over-the-counter medicines are taxable, and that only prescription drugs are exempt, to conclude no exemption applied to health food products and herbal supplements.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-2000-027

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

October 23, 2000

XXXX
XXXX
XXXX

RE: Your letter dated October 11, 2000

Dear XXXX:

I have been asked to answer your letter that we received earlier this month. You state that your company is registered to report Kansas sales and use tax and that you have added a number of new products to your product line. You ask if these new products are subject to Kansas sales and use tax. Please be advised that they are.

The products in question are health food products or herbal supplements. They include: (1) caplets that contain extracts of beets, carrots, and barley; (2) aloe vera juice; (3) pollen extract supplement; (4) trace mineral supplements; (5) dried barley juice; (6) coenzyme Q10 supplements, (7) freshwater clam extract; (8) cranberry juice; (9) an herbal diet supplement; (10) carrot juice powder; (11) an antioxidant supplement, (12) a powdered fiber dietary supplement, and various other supplements of a similar nature.

As you know, other states that exempt food sales exempt the sale of many of your products. Unlike these states, Kansas imposes sales tax on retail sales of food and food products. Similarly, Kansas imposes sales tax on retail sales of over-the-counter medicines. We only exempt sales of prescription drugs. Accordingly, there are no Kansas exemptions that apply to exempt the retail sale of your products.

I hope that this adequately answers all of your questions. If not, you can call me at (785) 296-3081 or visit our web site at www.ink.org/public/kdor/ . We have written a number of other opinion letters that reach a similar conclusion about the taxability of retail sales of herbal supplements.

Sincerely,

Thomas E. Hatten

Attorney/Policy & Research

Date Composed: 10/24/2000 Date Modified: 10/10/2001

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