Is orgeat almond syrup, a sweet mixer used in soft and alcoholic drinks, subject to New York sales tax?

Plain-English summary

A wholesale maker of orgeat (an almond syrup of water, sugar, almonds, orange-flower water, almond extract, and rose water, used to sweeten soft drinks and cocktails) asked whether its product is taxable. It sells the syrup online, in grocery stores, and to bars and restaurants.

The Office of Counsel concluded the syrup is subject to sales tax. New York generally exempts food and beverages, but Tax Law § 1115(a)(1) carves out soft drinks, sodas, and fountain-type beverages, as well as fruit drinks containing less than 70% natural fruit juice. Under the regulations a "beverage" includes a drink "whether sold in liquid form or otherwise," and "soft drinks and sodas" include cocktail and other drink mixes. Orgeat has no natural fruit juice and serves as a mixer, so it is a taxable soft drink.

What this means for you

Beverage and syrup makers / distributors

Sweet mixers and syrups with no natural fruit juice are generally taxable soft drinks, not exempt food. Collect sales tax on sales to consumers.

Grocers, bars, and restaurants

When you buy this kind of syrup to resell (in its original form or as an ingredient in a drink you sell), you can buy it tax-free by giving the seller a resale certificate. When you buy it for your own use, expect to pay tax.

Accountants and tax professionals

Apply the § 1115(a)(1) soft-drink/fruit-drink tests: no natural fruit juice and use as a beverage/mixer pushes a "food-like" product into the taxable column. See TB-ST-65 (Beverages).

Common questions

Q: Why isn't a food syrup exempt like other groceries?
A: The food exemption specifically excludes soft drinks and low-juice beverages. A no-juice mixer falls in that excluded category.

Q: How can the maker avoid charging tax to bars and stores?
A: By collecting a properly completed Form ST-120 (Resale Certificate) in good faith within 90 days of the sale, for buyers who will resell the syrup or use it as an ingredient in a beverage they sell.

Q: Does adding some fruit juice change the answer?
A: A fruit drink needs at least 70% natural fruit juice to qualify for exemption; this product had none.

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner. Treat it as guidance and confirm your own facts.

Citations and references

Statutes and guidance:
- Tax Law § 1105(a); § 1115(a)(1)
- 20 NYCRR 528.2(b)(2); TB-ST-65 (Beverages Sold by Food Stores, Beverage Centers and Similar Establishments)
- Form ST-120 (Resale Certificate)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales-ao-2020.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a20-15s.pdf

Original ruling text

New York State Department of Taxation and Finance
Office of Counsel

TSB-A-20(15)S
Sales Tax
June 9, 2020

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S160325A

The Department of Taxation and Finance (“the Department”) received a Petition for
Advisory Opinion from [ REDACTED ] (hereinafter “Petitioner”). Petitioner asks whether
orgeat syrup is subject to New York State and local sales taxes. We conclude that orgeat
syrup is subject to sales tax.
Facts
Petitioner is a wholesale manufacturer of orgeat almond syrup. Petitioner sells the
product online, as well as in grocery stores. The syrup is also sold to bars and restaurants.
Orgeat almond syrup consists of water, sugar, almonds, orange flower water, almond extract
and rose water, and is used to sweeten soft drinks and alcoholic beverages.
Analysis
Tax Law § 1105(a) imposes tax on retail sales of tangible personal property. Food and
beverages are generally exempt from tax; however this exemption does not include: fruit
drinks that contain less than 70% natural fruit juice; soft drinks, sodas and beverages that are
ordinarily dispensed at soda fountains (other than coffee, tea and cocoa); and beer, wine or
other alcoholic beverages. Tax Law § 1115(a)(1). “A beverage is a drink, whether sold in
liquid form or otherwise.” 20 NYCRR 528.2(b)(2). “Soft drinks and sodas include
carbonated and noncarbonated beverages, carbonated water, dietetic beverages and cocktail
and other alcoholic drink mixes.” 20 NYCRR 528.2(b)(2). Petitioner’s product contains no
natural fruit juice. It is used as a mixer in both alcoholic and non-alcoholic beverages.
Accordingly, we conclude it is a soft drink subject to sales tax. See id.; TB-ST-65, Beverages
Sold by Food Stores, Beverage Centers and Similar Establishments.
Petitioner states that it sells its product online and in grocery stores, as well as to bars
and restaurants. Petitioner must collect sales tax on sales of its product to consumers.
However, Petitioner will not be required to collect tax from purchasers who will resell its

-2-

TSB-A-20(15)S
Sales Tax
June 9, 2020

product, either in its original form or as an ingredient in a beverage, if it receives from the
purchaser in good faith a properly completed Form ST-120, Resale Certificate within 90 days
after the sale of the product.

DATED: June 9, 2020

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

NOTE:

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. The
information provided in this document does not cover every situation and is not
intended to replace the law or change its meaning.