Does the Texas fishing bait exemption put fishermen on the same footing as hunters, and are ice and small containers of honey taxable?

Subject

Bait For Fishing Is Exempt — Fish Considered Wildlife

Plain-English summary

A taxpayer wrote to thank the Comptroller for the sales tax exemption on perishable fishing bait, and also raised two other questions: whether ice purchased for drinking water should be taxed, and whether honey sold in pint and quart containers by a restaurant (ABC BARBEQUE) should be taxed.

On the bait exemption, the Comptroller's office confirmed the exemption is meant to put fishermen "on an equal footing with the exemptions available for hunters" -- in other words, fishing bait is treated the same way tax-wise as items exempt for hunting.

On ice, the answer went the other way: even though ice is for consumption, Texas law defining "food products" specifically excludes items like carbonated and noncarbonated packaged soft drinks, diluted juices, ice, and candy from that exempt category. So ice purchased for drinking water is taxable.

On honey, the Comptroller sided with the taxpayer: honey sold in pint and quart containers is not "food ready for immediate consumption," so it is not taxable -- even when a restaurant sells it in those quantities. The letter states the Comptroller's office would make sure ABC BARBEQUE was informed that this food, sold in quantities not ready for immediate consumption, is nontaxable.

What this means for you

Fishermen and bait/tackle retailers

Perishable fishing bait qualifies for a sales tax exemption, mirroring the exemption already available to hunters. This letter doesn't spell out the underlying statute, but it confirms the Comptroller's policy intent: fishing and hunting are treated equivalently for this exemption.

Restaurants and food-service businesses selling packaged items

If you sell food in a form not "ready for immediate consumption" -- this letter's example is honey in pint and quart containers -- that sale is not taxable, even though you're a restaurant and even though the same item might be taxable if served differently. Ice, however, is specifically carved out of the "food products" exemption and remains taxable regardless of how it's sold or used.

Accountants and tax professionals

This letter is a useful, concrete illustration of two edges of the Texas food-products exemption: (1) ice, soft drinks, diluted juices, and candy are excluded from "food products" by definition and stay taxable, while (2) packaged food not ready for immediate consumption -- even when a restaurant sells it -- can fall outside the taxable "prepared food" category. Use it as an example, not a citable statute, since no code section is quoted in the letter itself.

Common questions

Q: Is fishing bait exempt from Texas sales tax?
A: Yes. The letter confirms a bait exemption exists and describes it as putting fishermen on an equal footing with the exemptions available to hunters.

Q: Is ice taxable in Texas even though people buy it to drink with water?
A: Yes. Texas law's definition of "food products" specifically excludes ice (along with carbonated and noncarbonated packaged soft drinks, diluted juices, and candy), so ice is taxable even though it's purchased for consumption.

Q: Is honey sold in pint and quart containers by a restaurant taxable?
A: No. The letter states that honey sold in pint and quart containers is not "food ready for immediate consumption," and is therefore not taxable, even when sold by a restaurant in those quantities.

Q: Does this letter cite the specific statute for the bait exemption or the food-products definition?
A: No. The letter describes the results and paraphrases the reasoning ("Texas law, concerning food and food products, specifically states...") but does not quote a specific statute or rule number.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9609L1430D09

Original ruling text

September 16, 1996

Dear ***:

Mr. Sharp asked me to respond to your recent letter commenting on the exemption
on perishable bait and on two situations involving your purchases of ice and
pint and quart containers of honey that you believe should not be taxed.

First let me thank you for your kind comments with regard to the bait
exemption. Our office always tries to apply taxes that we administer in a fair
and equitable manner. The exemption for bait puts fishermen on an equal footing
with the exemptions available for hunters.

With regard to the taxability of ice that you purchased for consumption with
water that you drink, you felt that the ice should not have been taxed because
it is a food product. Texas law, concerning food and food products,
specifically states that the term "food products" does not include items such
as carbonated and noncarbonated packaged soft drinks and diluted juices, and
ice and candy. Therefore, even though these items are for consumption, they
are taxable when purchased as required by the legislature.

Honey sold in pint and quart containers is not considered "food ready for
immediate consumption" and is therefore not taxable even when sold by a
restaurant in these quantities. I'll see that ABC BARBEQUE is made aware of
the nontaxable status of food sold that is not ready for immediate consumption.

I hope this satisfactorily answers your questions. Should you require
additional information, please feel free to call Gilbert Zamora of the Tax
Policy Division toll free at 1-800-531-5441, extension 3-4502.

Sincerely,

Karey W. Barton, Manager
Tax Policy Division

cc: Gilbert Zamora

NOTE: Previous Accession Number 9609558L