How did Texas require vending-machine operators to report food, candy, soft drinks, and cigarettes under the historical rules described in 1990?

Plain-English summary

Beginning October 1, 1987, vending-machine food items were reported at 50% of their retail selling price, without a spoilage allowance.

Candy and soft drinks were not treated as food items and were reported at their full retail price. Cigarettes had been subject to sales tax since October 2, 1984 and were also taxed on the full retail price, including vending-machine sales.

The letter also described a superseded pre-October 1987 method for food sales of 17 cents or more. These are historical rules, and STAR warns generally that older documents may not reflect current policy.

Common questions

How were food items reported after October 1, 1987? At 50% of retail price, with no spoilage allowance.

Were candy and soft drinks included in that food treatment? No. They were reported at full retail price.

What about cigarettes? They were taxable at full retail price under the historical rule described.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9002L0980A08

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller February 22, 1990

Dear ***:

Thank you for your recent letter regarding the taxability of
vending machine sales.

Before October 1, 1987 food sales through vending machines for
$.17 or more could be reported at the wholesale cost plus 35%
mark-up or the actual retail sales price. Candy and soft drinks
are not considered food items and have always been reported at the
full retail sales price.

Beginning October 1, 1987, food items are reported at 50% of the
retail sales price with no allowance for spoilage.

Cigarettes became subject to sales tax on October 2, 1984, and
have since been subject to sales tax on the full retail sales
price. This includes sales from vending machines.

I have completed the list you sent in; however, the dates were
corrected to reflect when the changes took effect.

This opinion is based on the facts presented. If there are
additional or different facts, the opinion may change. .

If you have any questions or need additional information, you may
call me toll free at 1-800-252-5555, extension 5-0330. The
regular number is 512/463-4600, or write me at Tax Correspondence,
Comptroller of Public Accounts.

Sincerely,
Bettie U. Peterson
Tax Correspondence Division