June 29, 2004 - Columbus, Ohio
- Change in Food Definition saves Ohio
Consumers $21 Million Annually
Columbus -- Ohio consumers will be biting
off less sales tax soon because of a new law changing Ohio’s
definition of “food.”
Beginning July 1, some items newly defined as “food” will no
longer be subject to sales tax. Those items include:
- bottled, unsweetened water;
- ice (sold at grocery, convenience or similar stores);
- fruit or vegetable juice with fruit or vegetable content
of more than 50%;
- chewing gum and breath mints; and
- sweetened beverages that contain milk, a milk product or
These changes in “food” definitions result from Ohio’s
participation in the Streamlined Sales Tax Project (SSTP), a
multi-state effort to make sales tax laws, rules, and systems
more uniform across states and easier for vendors to collect
The move will cost Ohio about $21 million in sales tax
revenue over the next twelve months, but Tax Commissioner
William W. Wilkins says in the long run, Ohio’s state and
local governments stand to gain a much larger chunk of tax
“Ohio, and every other state with a sales tax, is losing
hundreds of millions of dollars in sales tax revenue on sales
by Internet and catalog retailers that are not required by
law to collect state taxes. The goal of the Streamlined Sales
Tax Project is to capture that revenue with those
out-of-state retailers either volunteering, or being required
by Congress, to collect state sales taxes.”
Wilkins says the SSTP will benefit Ohio retailers who
currently collect the sales tax and who have to compete with
out-of-state retailers who don’t have to charge tax.
The Ohio Department of Taxation (ODT) has been working to
notify merchants of the new definitions through brochures,
other informational mailings, meetings with the Ohio Grocers
Association and other interested groups, as well as updates
on the ODT Web site (tax.ohio.gov).
- “Food” in Ohio is now defined as: substances, whether in
liquid, concentrated, solid, frozen, dried or dehydrated
form, that are sold for ingestion or chewing by humans and
are consumed for their taste and nutritional value.
- A “soft drink” is now determined by whether the beverage
is sweetened, not whether it is carbonated. A soft drink,
generally a beverage that contains a sweetener, natural or
artificial, is not food and is subject to sales tax.
However, beverages containing milk products, milk
substitutes, or more than fifty percent fruit or vegetable
juice are not soft drinks and are food.
- Coffee or tea with a sweetener is now considered a soft
drink and is subject to tax. (Plain coffee or tea is food and
is not taxable.)
- Any item with a “Nutrition Facts” box on the label,
including nutritional and diet products (e.g. Ensure®,
SlimFast®, etc.), is generally considered to be food and it
is not taxable. Any item with a “Supplement Facts” box on the
label, including items sold as dietary supplements, is
generally not considered to be food and so is subject to
- Food consumed off the premises where it’s sold is not
taxed. Food consumed on the premises is taxed.
- Purchases using food stamps are not taxable.
- Alcoholic beverages are not food and are subject to sales
tax. Non-alcoholic beer with less than 0.5% alcohol content
is considered food and is not taxable.
(For more information, contact Gary Gudmundson, ODT
Communications Director, at 614-644-6903.