Sales, Use and International Tax Activity Update - January 2012

Indiana Food Taxability - All Fluff?

Indiana made changes to its food taxability law effective January 1, 2012.

State bulletin #29 describes the changes and notes that "generally, the sale of food ingredients for human consumption is exempt from Indiana sales tax."

However, the definition of "food" excludes tobacco, alcoholic beverages, candy, dietary supplements and soft drinks. Taxable items include, but are not limited to: Cake decorations, Cracker Jacks, Flaked coconut with sweetener, Gluten-free candy products, Toothpaste, Mouthwash and Marshmallows.

Determining which items are taxable can prove difficult. For instance, marshmallows are taxable but marshmallow creme is exempt.

January 2012, Sales Tax Information Bulletin #29 can be found on the Indiana Government website.

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