Did Illinois classify the requester's supplement-labeled drinks and protein powder as soft drinks for sales-tax purposes?

Plain-English summary

Illinois did not classify the requester's probiotic drink, recovery drink, metabolism water, energy drink, or protein-shake powder individually. It provided the soft-drink definition effective September 1, 2009 and described a proposed regulation.

Under the cited definition, a soft drink was a nonalcoholic beverage containing natural or artificial sweeteners. The definition excluded beverages containing milk or milk products, soy, rice, or similar milk substitutes, and beverages containing more than 50% fruit or vegetable juice by volume.

The proposed rule said beverage powders and fruit-flavored soft-drink mix concentrates were not soft drinks. It also listed examples of sweeteners, including sucralose, which counsel noticed in one submitted product. The GIL did not say that a Supplement Facts panel alone controlled the classification.

What this means for you

Classification depended on the product's form and ingredients under the cited historical rules, not simply its marketing or label panel. This GIL does not establish the treatment of any named product today.

Common questions

Q: Did the Department decide whether every submitted drink was a soft drink?
A: No. It gave general rules only.

Q: What did the proposed rule say about beverage powders?
A: It said beverage powders and fruit-flavored drink-mix concentrates were not soft drinks.

Citations and references

• 35 ILCS 120/2-10
• Public Acts 96-34, 96-37, and 96-38
• Proposed 86 Ill. Adm. Code 130.310, Illinois Register Issue 18 (April 30, 2010)

Subject

Food

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2010.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2010/st-10-0040.pdf

Original ruling text

ST 10-0040-GIL 05/14/2010 FOOD
Effective September 1, 2009, "soft drinks" mean non-alcoholic beverages that contain natural
or artificial sweeteners; but "soft drinks" do not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater than 50% of vegetable or fruit juice by
volume. See 35 ILCS 120/2-10. (This is a GIL.)

May 14, 2010

Dear Xxxxx:
This letter is in response to your letter dated March 18, 2010, in which you request information.
The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are issued by the
Department in response to specific taxpayer inquiries concerning the application of a tax statute or
rule to a particular fact situation. A PLR is binding on the Department, but only as to the taxpayer
who is the subject of the request for ruling and only to the extent the facts recited in the PLR are
correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in the
Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information Letter
(“GIL”) is to direct taxpayers to Department regulations or other sources of information regarding the
topic about which they have inquired. A GIL is not a statement of Department policy and is not
binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website at
www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to your
inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
COMPANY request [sic] a written opinion on the taxability of various beverages that
contain a Supplement Facts panel on their packaging. I have attached product
information for each beverage.
DRINK – helps to regulate the digestive system with probiotics.
ABC – Muscle recovery drink supplement.
WATER – metabolism boosting water.
DRINK2 – Energy supplement drink.
XYZ – Protein shake powder.

DEPARTMENT’S RESPONSE:

Although we cannot give you a specific answer in the form of a General Information Letter, we
hope you find the following helpful.
Beginning September 1, 2009, "soft drinks" mean non-alcoholic beverages that contain natural
or artificial sweeteners; but "soft drinks" do not include beverages that contain milk or milk products,
soy, rice or similar milk substitutes, or greater than 50% of vegetable or fruit juice by volume. (See
Public Acts 96-34, 96-37, and 96-38 and 35 ILCS 120/2-10.) The Department’s regulation concerning
soft drinks is in the process of being revised to reflect this change. Currently, the proposed rule can
be found in Issue 18 of the Illinois Register, dated April 30, 2010, which can be accessed from the
website of the Joint Committee on Administrative Rules.
Once the proposed rule is adopted, you
can access it on the Department’s website at 86 Ill. Adm. Code 130.310. Note, the proposed rule
provides that beverage powders or fruit flavored soft drink mix concentrates are not considered soft
drinks. In addition, examples of various sweeteners are listed in the proposed rule, one of which is
“sucralose” which I noticed is contained in one the products about which you inquired.
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.
Very truly yours,

Debra M. Boggess
Associate Counsel
DMB:msk