Change in Taxability of Snack Items

Due to a change in law effective Sept. 1, 2013, snack foods are exempt from sales tax, unless they are sold through a vending machine or in individual-sized portions. Snack foods sold through a vending machine or in individual-sized portions are taxable – it doesn’t matter where they are sold or if eating facilities are provided by the seller.

Snack foods include:

• breakfast bars, granola bars, nutrition bars, protein bars, sports bars or yogurt bars, unless they are labeled and marketed as candy;
• snack mix and trail mix;
• nuts, unless candy-coated;
• popcorn; and
• chips, crackers or hard pretzels.

Candy, gum and soft drinks are not considered snack foods for sales tax purposes and are taxable regardless of the portion size. 

An individual-sized portion is labeled as having not more than one serving; or, if the package does not specify servings, contains less than 2.5 ounces. 

This change was created by Senate Bill 1151 (83rd Regular Legislative Session), which amended Section 151.314 of the Texas Tax Code.

This is a general information notice and is not in reference to any specific tax account or taxpayer.

Source: State of Texas Comptroller Office.