Are Fruit Snacks, Fruit Gushers, and Craisins taxable candy or exempt food in New York?

Plain-English summary

The petitioner runs a supermarket chain and asked whether "Fruit Snacks," "Fruit Gushers," and "Craisins" are subject to sales tax. It pointed out the ingredients of Fruit Snacks and Fruit Gushers resemble those of fruit roll-ups (which the Department's publications list as exempt), and explained that Craisins are made by infusing sliced dried cranberries with a sugar/juice solution rather than merely coating them.

The Office of Counsel concluded all three products are exempt from sales tax.

• The food exemption and its candy carve-out. Food and food products are exempt under Tax Law 1115(a)(1), except candy and confectionery (20 NYCRR 528.2(a)(4)). Neither term is defined by statute, so the focus is on what the product is.
• Fruit Snacks & Fruit Gushers = exempt. They're substantially similar in content to fruit roll-ups, which the Department's Publications 840 and 880 treat as exempt. So they're exempt too.
• Craisins = exempt. The dried cranberries are sweetened by infusing them with a sugar solution -- a process distinct from coating an otherwise-exempt food with sugar or chocolate (sugar-coated raisins are taxable). Infusion makes naturally tart cranberries suitable as a snack or baking item without making them candy or confectionery.

What this means for you

Grocers and food retailers

The candy/confectionery line turns on what the product is and how it's made, not just sweetness. A product that mirrors an item the Department already treats as exempt food (like fruit roll-ups) is exempt. And infusing fruit with sugar isn't the same as coating it -- infused dried fruit (Craisins) stays exempt, while sugar-coated nuts and raisins are taxable.

Classifying new snack SKUs

Compare ingredients and process to the Department's published taxable/exempt food lists (Pub 840, Pub 880). Coating an exempt food in sugar/chocolate generally makes it taxable confectionery; infusion or similar processing that keeps it a "food" does not.

Common questions

Q: Why are Fruit Snacks and Gushers exempt?
A: Their ingredients are substantially similar to fruit roll-ups, which the Department's publications list as exempt food.

Q: Aren't sweetened dried cranberries (Craisins) candy?
A: No. They're infused with a sugar solution, which is different from coating an exempt food with sugar. Infusion makes tart cranberries edible without turning them into candy. (Sugar-coated raisins, by contrast, are taxable.)

Citations and references

• Tax Law section 1105(a) (sales tax on tangible personal property)
• Tax Law section 1115(a)(1) (food exemption; excludes candy and confectionery)
• 20 NYCRR 528.2(a)(2) (definition of food and food products)
• 20 NYCRR 528.2(a)(4) (definition of candy and confectionery)
• Publication 840 (Guide to Sales Tax for Drugstores and Pharmacies)
• Publication 880 (Taxable and Exempt Foods and Beverages)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2009.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a09_38s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-09(38)S
Sales Tax
August 26, 2009

Office of Counsel
Advisory Opinion Unit
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S080915A

On September 15, 2008, the Department of Taxation and Finance received a Petition forAdvisory
Opinion from (Petitioner) name and address redacted.
The petition requests clarification on whether “Fruit Snacks,” “Fruit Gushers,” and “Craisins” are
subject to sales tax.
We conclude that these products are not subject to sales tax.
Facts
Petitioner operates a supermarket chain and sells the three products referred to above.
The ingredients of “Fruit Gushers-tropical flavors” as listed in order on a package of this product
are: “pears from concentrate, sugar, dried corn syrup, corn syrup, modified corn starch, fructose, partially
hydrogenated cottonseed oil, grape juice from concentrate, citric acid, sodium citrate, glycerin, natural
and artificial flavor, vitamin C.”
The ingredients of “Fruit Snacks-berries N Cherries” as listed in order on a package of this
product are: “juice from concentrates (apple, grape, pear, peach and pineapple) corn syrup, sugar,
modified corn starch, fruit puree, (apple, strawberry and raspberry) gelatin, citric acid, lactic acid, natural
and artificial flavors, vitamins C, E and A.”
The ingredients of “Craisins - Original” are: “cranberries and sugar.” Petitioner provided the
following description of the production process of “Craisins,” from the manufacturer of this product:
Frozen cranberries are first sliced, and the juice is partially extracted from the cranberry
piece/hull. Then it is submerged into a bath which contains characterizing juice (Blueberry or Grape or
Pomegranate) and sugar (sweetness) and citric acid. It slowly infuses the piece/hull. Next it is drained
and dried to a low moisture reading (which will not support bacterial growth).
Petitioner also provided the ingredients of “Fruit Rollups- wildberry punch” as listed in order on
a package of this product: “pears from concentrate, corn syrup, sugar, partially hydrogenated cottonseed
oil, citric acid, sodium citrate, acetylated mono and diglycerides, pectin, malic acid, natural flavor,
vitamin C.”
Analysis
Section 1105(a) of the Tax Law imposes sales tax on receipts from the retail sale of tangible
personal property. Section 1115(a)(1) in part exempts from sales tax food and food products. One of the

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TSB-A-09(38)S
Sales Tax
August 26, 2009

exclusions from this exemption is “candy and confectionery.” There are no statutory definitions of candy
and confectionery.
Section 528.2(a)(2) of the Sales and Use Tax Regulations provides that “food and food products”
means edible commodities whether prepared, processed, cooked, raw, canned or in any other form
generally regarded as food. A list of food and food products includes, among other things, condiments,
sweetening agents, and snacks (except candy and confections).
Regulation section 528.2(a)(4) provides that “Candy and confectionery include, without
limitation, candy of all types; chocolate (plain or mixed with other products); glazed or sugar-coated
fruits, nuts, peanuts, popcorn, or other products and any similar product regarded as candy or
confectionery based on its normal use or as indicated on the label or in advertising thereof.”
The Department of Taxation and Finance has issued two publications that provide a list of taxable
and exempt foods. Publication 840, “A Guide to Sales Tax for Drugstores and Pharmacies,” has two
sections that characterize certain foods as being taxable or exempt. On page 4 is a listing of candies and
confections. Taxable items include sugar coated nuts and raisins. “Glazed fruit” is listed as not being
subject to sales tax. On page 26 is a listing of exempt foods that includes “Fruit Rollups,” sugar, and
sugar substitutes.
Publication 880, “Taxable and Exempt Foods and Beverages Sold at Retail Food Markets and
Similar Establishments,” provides that fruit rollups are exempt from tax. Under taxable foods, coated
candies are listed. The listing for “coated candies” is footnoted to include “Sugar-, chocolate- or candycoated nuts, raisins, malted milk balls and similar products.” There is no reference to coated fruit other
than coated raisins.
The statute lacks clarity as far as the taxable status of food products that may be characterized as
candy or confectionery. The law does not define these terms. The regulations in part define “candy” as
“candy of all types.” It is important that there be reasonable and readily discernable standards for
categorizing food products as candy or confectionery. The primary focus in determining taxable status
should be on what the product is (i.e., what it consists of) and how the product fits within the statutory
and regulatory scheme.
Petitioner contends that “Fruit Snacks” and the “Fruit Gushers” are similar in their ingredients to
“Fruit rollups,” which are listed as exempt from tax in Tax Department Publications 840 (“Guide to Sales
Tax for Drugstores and Pharmacies”) and 880 (“Taxable and Exempt Foods”). In describing the process
of creating “Craisins,” Petitioner makes a distinction between coating a product and soaking the product
in a sugar solution, which not just coats but infuses the product with the solution.
Our analysis based on the above standard finds that “Fruit Snacks” and “Fruit Gushers” are
substantially similar in content to “Fruit rollups,” which have been deemed exempt from tax. Therefore,
these two products are not subject to sales tax.
We also decide that “Craisins” are not a candy or confectionery subject to sales tax. We accept
Petitioner’s argument that the process of infusing the dried cranberries with a sugar solution is a process
distinct from merely coating an otherwise exempt food item with sugar or chocolate. The infusing
process sweetens naturally tart cranberries so that they are suitable for consumption as a snack or baking

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TSB-A-09(38)S
Sales Tax
August 26, 2009

supply, but it does not make the cranberries candy or confectionary. Therefore, “Craisins” are exempt
from tax under section 1115(a)(1) of the Tax Law.

DATED: August 26, 2009

NOTE:

/S/
Jonathan Pessen
Director of Advisory Opinions
Office of Counsel

An Advisory Opinion is issued at the request of a person or entity. It is limited to
the facts set forth therein and is binding on the Department only with respect to
the person or entity to whom it is issued and only if the person or entity fully and
accurately describes all relevant facts. An Advisory Opinion is based on the law,
regulations, and Department policies in effect as of the date the Opinion is issued
or for the specific time period at issue in the Opinion.