Were the listed cake and cookie decorations taxable as candy under Texas Letter Ruling 9204L1164F10?

Plain-English summary

The nine listed cake and cookie decorations were not taxable.

The Comptroller explained that candy was generally taxable, but confections used exclusively for cooking, such as chocolate bits, were not taxable as candy. The nontaxable list covered General Mills Nonpareils Decor, Chocolate Flavored Decor, and Green Crystals Decor, plus Betty Crocker Decor Toppers, Rainbow Mix, Decor Selects, Candy-Coated Chocolate Chips, Silver Dragees Decor, and Red Crystals Decor.

What this means for you

Under this letter, the products' use as cooking and baking decorations controlled their treatment rather than their candy-like ingredients or appearance.

Common questions

Was candy generally taxable? Yes, according to the letter.

Why were these decorations nontaxable? The Comptroller treated them as confections used exclusively for cooking.

Were candy-coated chocolate chips included? Yes. The letter expressly listed them as nontaxable.

Were silver dragees and colored crystals included? Yes.

Citations and references

The letter cited no specific statute or administrative rule. It enclosed the Comptroller's brochure, "What is Taxable at Grocery and Convenience Stores."

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9204L1164F10

Original ruling text

April 10, 1992

Dear ***:

Thank you for your recent letter concerning taxability of certain cake/cookie
decorations that *** sells.

As a general rule, candy is taxable, but confections used exclusively for
cooking, such as chocolate bits, are not taxable as candy. The following items
you listed are not taxable:

General Mills Nonpareils Decor - Not Taxable
General Mills Chocolate Flavored Decor - Not Taxable
General Mills Green Crystals Decor - Not Taxable
Betty Crocker Decor Toppers - Not Taxable
Betty Crocker Rainbow Mix - Not Taxable
Betty Crocker Decor Selects - Not Taxable
Betty Crocker Candy-Coated Chocolate Chips - Not Taxable
Betty Crocker Silver Dragees Decor - Not Taxable
Betty Crocker Red Crystals Decor - Not Taxable

I've enclosed our brochure "What is Taxable at Grocery and Convenience Stores"
for you to review. I hope this helps you.

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

Please feel free to write or call if you have additional questions. You may
call toll-free at 800-252-5555 or write the Tax Administration Division at the
address above.

Sincerely,

Joe D. Newman
Tax Administration Division