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Is food taxable in Texas?

by TaxJar January 25, 2024

Please note: This blog was originally published in 2020. It’s since been updated for accuracy and comprehensiveness.

Each state in the United States is allowed to make its own rules and laws when it comes to what is taxable and what isn’t. One product that is often taxed very differently from state to state is food. This post will help you determine when (and when not) to charge sales tax on food in the Lone Star State.

Are groceries taxable in Texas?

In general, grocery items are tax exempt in Texas. This includes bread, milk, produce, etc. 

Texas, though, considers many “snack items” or other sweet treats to be taxable. For example, “snack items” like granola bars are taxable when sold in individual portions, in servings containing less than 2.5 ounces, or when sold via vending machine. Food items that contain no milk and are not made up of more than 50% fruit juice are also taxable. (Milk is considered a non-taxable food in Texas and items, including drinks, made with mike are generally not taxable in the Lone Star State). 

Be use caution here! If you sell a mix of things – like a box of various ice cream treats – then chances are that box of popsicles, etc. isn’t taxable. 

Candy and gum are also considered taxable in Texas.

Are meals taxable in Texas?

Meals are generally taxable in Texas, whether eaten “dine in” or “to go.” 

However, as in many states, Texas doesn’t consider bakery food to be taxable as long as that food is sold without eating utensils. This includes individual portions (such as slices of pie) or whole portions (such as an entire pie.)  Bakery food sold with eating utensils is considered prepared food and is taxable. 

Are beverages taxable in Texas?

Soft drinks, powdered drinks, energy drinks and the like are taxable in Texas. Drinks that do not contain more than 50% fruit and vegetable juice are taxable. However, drinks that contain milk are generally non-taxable. 

Coffee, tea, bottled water and other types of unflavored water are generally non-taxable in Texas. 

How to Always Collect the Correct Amount of Sales Tax in Texas

Do you sell groceries, meals or beverages? Are you required to collect sales tax in Texas? Then this may sound like a huge headache. 

TaxJar is here to help.

With the TaxJar API, you can be sure you’re collecting the right amount of sales tax on every transaction. Our product tax codes ensure you do collect sales tax on that soft drink but don’t collect sales tax on that plain coffee drink. 

Not to mention, most eCommerce businesses have nexus in multiple states. For example, groceries are taxable in some states, but non-taxable in others. Or, like Texas, where many treats are taxable unless they contain milk or more than 50% fruit or veggie juice. With TaxJar, you’ll collect the right amount of sales tax from every customer, in every state, every time.

Further food and meal taxability resources:

• Sales Tax by State: Are grocery items taxable? 
• Sales Tax by State: To-Go Restaurant Orders
• Is the food I sell on my food truck taxable? 
• Texas Sales Tax Guide for Businesses

Ready to automate sales tax collection, reporting and filing? Click here for more on how TaxJar can take the headache out of sales tax in your food & beverage business.

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