Indiana Clarifies Exemption for Food

Wednesday, December 21, 2011

The Indiana Department of Revenue clarified its sales tax exemption for food and food ingredients in a recent Information Bulletin. Indiana exempts the sale of food and food ingredients for human consumption. The bulletin explains that this exemption applies to what is commonly referred to as "grocery food. " For purposes of the exemption, "food" is defined as substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and that are consumed for their taste or nutritional value. However, the term "food" does not include tobacco, alcoholic beverages, candy, dietary supplements, or soft drinks, so sales of those items are not exempt. The bulletin has lists of examples of exempt food items and taxable grocery items and candy.

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