Ezel / Tax Rulings / TX
TX 9201L1157E03 Sales and/or Use Tax (State,Local,MTA) 1992-01-30

What portion of vending-machine receipts did Texas require the operator to report for candy, drinks, juice, cookies, and snack foods?

Short answer: The operator had to report tax on 100% of receipts from candy, sodas, and juice that was not 100% pure fruit juice. It reported tax on 50% of receipts from cookies, granola bars, snack mix, peanuts, crackers, chips, 100% pure fruit juice, and pies.

Apply this to your situation

This page answers the general question as of 1992. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1992
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Comptroller divided the vending-machine operator's edible-product receipts into two reporting groups.

Tax was reported on 100% of gross receipts from candy bars, candy pieces, sodas, and juices that were less than 100% pure fruit juice, including diluted juice, nectars, and juice with added water or sugar.

Tax was reported on 50% of gross receipts from cookies, granola bars, Gardetto Snack, peanuts, crackers, chips, 100% pure fruit juice, and pies. The result for cookies and granola bars did not depend on package quantity, and the granola-bar result did not depend on whether the product was chocolate-coated.

What this means for you

Vending-machine operators

Product classification changed the taxable receipt percentage under this 1992 letter. Keep product-level sales records rather than treating every edible vending item alike.

Accountants and tax professionals

This is historical percentage-reporting guidance. Verify the current vending-machine tax rules before using these percentages today.

Common questions

Were candy and soda reported at 100%? Yes.

How was diluted fruit juice treated? At 100% of gross receipts.

How was 100% pure fruit juice treated? At 50% of gross receipts.

Did cookie package size matter? No.

Were chips, crackers, peanuts, and pies in the 50% group? Yes.

Citations and references

The letter does not cite a specific statute or administrative rule.

Source

Original ruling text

January 30, 1992

Dear ***:

Thank you for your letter and the additional information you provided in
our telephone conversations. I apologize for the delay in responding. You
asked us to confirm the amount of tax you are required to report on sales of
edible products through vending machines.

You must report tax based on 100% of the gross receipts from sales of the
following items:

  1. Candy bars

  2. Candy pieces

  3. Sodas (soft drinks)

  4. Juices that are less than 100% pure fruit juice, including diluted
    juices, nectars, and any other juice with water and/or sugar added.

You must report tax based on 50% of the gross receipts from sales of the
following items:

  1. Cookies (regardless of quantity in package)

  2. Granola bars (regardless of whether chocolate-coated or plain, and
    regardless of quantity in package)

  3. Gardetto Snack (a seasoned combination of pretzels, chips, etc.)

  4. Peanuts

  5. Crackers (cheese, peanut butter, or wheat)

  6. Chips (assorted)

  7. Juices that are 100% pure fruit juice

  8. Pies

This opinion is based on the facts presented. Different facts, though
similar, might lead to different answers. If you have further questions,
feel free to write or call me at 1-800-252-5555, ext. 3-3889.

Sincerely,

John Christian, Attorney
Tax Administration Division

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