Is freshly extracted wheat grass juice and vegetable juice sold at a health food store's juice bar exempt from New York sales tax as food, or as a health-preservation product?

Plain-English summary

Jandi's Nature Way runs a health food store that extracts wheat grass juice and raw vegetable juices to order at a juice bar, where patrons can sit and drink them. Wheat grass juice is sold in one-, two-, or four-ounce open-top containers (with or without a lid); vegetable juices come in eight- or sixteen-ounce cups. The store argued these products should be treated as exempt under New York's health-preservation exemption — the one that covers drugs, medicines, and things like cough remedies and antiseptics — because juicing delivers concentrated, "living" nutrients that canned or bottled juice loses through pasteurization.

The Department rejected that specific argument: the health-preservation exemption is meant for products that work like medicine (treating or preventing a condition), not for products that preserve health simply through ordinary nutritional value — that's what the separate food/beverage exemption covers instead. Under that food/beverage exemption, both the wheat grass juice and the vegetable juices qualify as exempt beverages (vegetable juices are specifically listed as exempt in the regulations, even blended ones like tomato-and-clam).

But qualifying as exempt "food" doesn't end the analysis, because New York separately taxes food and drink sold for consumption on the seller's own premises — the restaurant tax applies regardless of whether the item would otherwise be tax-exempt. Since Jandi's juices are extracted to order and typically consumed right at the juice bar, on-premises sales are taxable. Juice intended for off-premises consumption can escape that tax only if it's sold unheated and in the same form, condition, quantity, and packaging that a typical grocery store would use for the same product — and cups or open containers filled to order don't match that standard. So even take-out sales of these juices, as described in this ruling, remained taxable, unless Jandi's could show through its own records that specific sales genuinely met the off-premises packaging test.

What this means for you

Juice bars and health food stores selling fresh juice

Fresh juice is generally exempt "food" in New York, but that exemption gets overridden by the restaurant tax whenever the juice is sold for consumption on your premises (at a bar, counter, or seating area) — packaging alone (a cup with a lid) doesn't automatically convert a sale into an exempt "grocery-style" takeout sale.

Businesses claiming a health-preservation-product exemption for nutrient-dense foods

Don't stretch the drugs/medicines exemption to cover nutritionally beneficial foods or beverages — that exemption is reserved for products functioning like medicine (treating or preventing illness), while nutrient-based claims belong under the ordinary food/beverage exemption instead.

Accountants and tax professionals

If a client wants to preserve the off-premises exemption for freshly prepared beverages, the safest path is matching grocery-store packaging, form, and quantity as closely as possible, and maintaining records substantiating which specific sales were genuinely for off-premises consumption, per Tax Law § 1132(c) and 20 NYCRR § 533.2.

Common questions

Q: Is fresh-squeezed juice exempt from New York sales tax?
A: As a beverage, yes, under the general food/drink exemption — but that exemption is overridden by the restaurant tax whenever the juice is sold for consumption on the seller's own premises.

Q: Can juice sold "to go" ever be exempt?
A: Only if it's unheated and sold in the same form, condition, quantity, and packaging commonly used by ordinary grocery stores (not restaurants/prepared-food establishments) — juice extracted to order into a cup generally doesn't meet that bar.

Q: Why didn't the health-preservation exemption apply here?
A: That exemption covers products that function like drugs or medicines to treat or prevent illness — not foods or beverages valued for their ordinary nutrient content, which fall under the separate food/beverage exemption instead.

Citations and references

Statutes and regulations:

• Tax Law § 1105(a) (retail sales tax); § 1105(d) (restaurant food/drink tax)
• Tax Law § 1115(a)(1) (food/beverage exemption); § 1115(a)(3) (health-preservation products exemption)
• Tax Law § 1132(c)(1) (presumption of taxability)
• 20 NYCRR § 527.8(a) (restaurant tax imposition); § 528.2(b) (beverage exemption; vegetable juices); § 528.4(b)(3) (health-preservation products)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2002.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a02_25s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-02(25)S
Sales Tax
July 11, 2002

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S000824A

On August 24, 2000, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Jandi’s Nature Way, Inc., 24 Atlantic Avenue, Oceanside, New York 11572.
The issue raised by Petitioner, Jandi’s Nature Way, Inc., is whether its sales of wheat grass
juice and freshly extracted vegetable juices prepared in a health food store are exempt from sales
and compensating use tax under Section 1115(a)(3) of the Tax Law.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner operates a health food store. Wheat grass juice and vegetable juices are sold at
the store as described below. Petitioner describes the process by which juice is obtained from the
wheat grass and vegetables as extraction. Petitioner asserts that extracting the juice, or juicing,
provides nutritional advantages of plant foods in a concentrated form that is easily absorbed by the
body. Petitioner states that without juicing, it is extremely difficult to get the amount of nutrition
needed to reduce the risk of certain diseases. Fresh juice contains enzymes and other “living”
ingredients. In contrast, canned, bottled and packaged juices have been pasteurized which keeps
them on the shelf longer but causes the loss of nutrients like vitamins and minerals.
The wheat grass juice is sold in small, open top plastic containers with or without a lid or
cover. The containers are one ounce, two ounces, or four ounces in size. The juice is freshly
extracted to order and sold as an individual portion ready to be consumed. Wheat grass juice can
be purchased and consumed on the health store premises or covered and frozen for consumption at
home. However, Petitioner recommends that wheat grass juice be consumed immediately after
extraction to obtain the maximum benefit from its consumption. Wheat grass juice is generally sold
for on-premise consumption. A one-ounce container of wheat grass juice sells for $1.79. A
four-ounce container sells for $7.19.
Petitioner also sells freshly prepared raw vegetable juices. The vegetable juices are freshly
extracted to order and sold as an individual serving portion. Vegetable juices are sold in eight ounce
or sixteen ounce cups. An eight ounce cup of vegetable juice sells for $2.29 to $3.99 and a sixteen
ounce cup sells for $3.49 to $6.39 depending on the individual customer order.
Generally, these juices are consumed on Petitioner’s premises at a juice bar where patrons
can be seated while consuming the juices.

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Applicable Law and Regulations
Section 1105(a) of the Tax Law imposes tax upon:
The receipts from every retail sale of tangible personal property, except as
otherwise provided in this article.
Section 1105(d) of the Tax Law imposes the tax, in part, on the following:
(i) The receipts from every sale . . . of food and drink of any nature or of food
alone, when sold in or by restaurants, taverns or other establishments in this
state . . . .
(1) in all instances where the sale is for consumption on the premises where
sold;
*

*

*

(3) in those instances where the sale . . . is for consumption off the premises
of the vendor, except where food (other than sandwiches) or drink or both are (A)
sold in an unheated state and, (B) are of a type commonly sold for consumption off
the premises and in the same form and condition, quantities and packaging, in
establishments which are food stores other than those principally engaged in selling
foods prepared and ready to be eaten.
Section 1115(a) of the Tax Law provides, in part:
Receipts from the following shall be exempt from the tax on retail sales
imposed under subdivision (a) of section eleven hundred five and the compensating
use tax under section eleven hundred ten:
(1) Food, food products, beverages, dietary foods and health supplements,
sold for human consumption but not including (i) candy and confectionary, (ii) fruit
drinks which contain less than seventy percent of natural fruit juice, (iii) soft drinks,
sodas and beverages such as are ordinarily dispensed at soda fountains or in
connection therewith (other than coffee, tea and cocoa) and (iv) beer, wine or other
alcoholic beverages, all of which shall be subject to the retail sales and compensating
use taxes, whether or not the item is sold in liquid form . . . nothing herein shall be
construed as exempting food or drink from the tax imposed under subdivision (d) of
section eleven hundred five.
*

*

*

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(3) Drugs and medicines intended for use, internally or externally, in the cure,
mitigation, treatment or prevention of illnesses or diseases in human beings, medical
equipment (including component parts thereof) and supplies required for such use
or to correct or alleviate physical incapacity, and products consumed by humans for
the preservation of health but not including cosmetics or toilet articles
notwithstanding the presence of medicinal ingredients therein or medical equipment
(including component parts thereof) and supplies, other than such drugs and
medicines, purchased at retail for use in performing medical and similar services for
compensation.
Section 1132(c)(1) of the Tax Law provides, in part:
For the purpose of the proper administration of this article and to prevent
evasion of the tax hereby imposed, it shall be presumed that all receipts for property
or services of any type mentioned in subdivisions (a), (b), (c) and (d) of section
eleven hundred five. . . are subject to tax until the contrary is established, and the
burden of proving that any receipt, amusement charge or rent is not taxable
hereunder shall be upon the person required to collect tax . . . .
Section 527.8(a) of the Sales and Use Tax Regulations provides, in part:
Imposition. Sales tax is imposed on the receipts . . . from every sale of . . .
food or drink of any nature sold in or by restaurants, taverns or other establishments
in this State or by caterers:
(1) in all instances where the sale is for consumption on the premises where
sold;
*

*

*

(3) in those instances where the sale is for consumption off the premises of
the vendor all sandwiches and other food or drink unless the food or drink is sold in:
(i) an unheated state; and
(ii) the same form and condition, quantities and packaging commonly used
by food stores not principally engaged in selling foods prepared and ready to be
eaten.
Section 528.2 of the Sales and Use Tax Regulations provides, in part:

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(a) Food and food products. (1) Food and food products, except candy and
confectionery, when sold for human consumption, are exempt from sales and
compensating use tax. . . .
(2) The terms food and food products as used in this section mean edible
commodities whether prepared, processed, cooked, raw, canned or in any other form,
which are generally regarded as food. This category includes, but is not limited to:
meat and meat products
milk products
cereals and grain products
baked goods
vegetables and vegetable products
fruits and fruit products
poultry
fish and seafood
frozen entrees and desserts
*

*

jellying agents
fats, oils and shortenings
condiments
spices
sweetening agents
food preservatives
food coloring
frozen dinners
snacks (except candy and confections)
*

(3) The phrase sold for human consumption means that the items sold are, in
their normal use, regarded as being for human consumption. Pet foods, which are
packaged, labeled or advertised as such, are not deemed sold for human
consumption.
(b) Beverages, other than water.
*

*

*

(1) Beverages sold for human consumption are exempt from sales and
compensating use tax, except for:
(i) fruit drinks which contain less than 70 percent of natural fruit juices;
(ii) soft drinks, sodas and beverages, such as are ordinarily dispensed at soda
fountains (other than coffee, tea or cocoa);
(iii) beer, wine and other alcoholic beverages.
(2) A beverage is a drink, whether sold in liquid form or otherwise.

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*

*

*

(3) Fruit juices are exempt beverages. Fruit drinks, ades, nectars and
cocktails which contain less than 70 percent natural fruit juices, are taxable.
(4) Soft drinks and sodas include carbonated and noncarbonated beverages,
carbonated water, dietetic beverages and cocktail and other alcoholic drink mixes.
(5) Vegetable juices, whether made of a single vegetable, or a combination
of vegetables, or a combination of a vegetable and other food product are exempt
beverages.
Example: A juice composed of tomato juice and clam extract is exempt.
(c) Dietary foods and health supplements.
(1) A dietary food is a food for a special dietary use for humans and which
bears on the label a statement of the dietary properties upon which its use is based
in whole or in part.
(2) Products which are intended to substitute for the ordinary diet, or
supplement the ordinary diet, or substitute for natural foods are exempt, when sold
for human consumption. Among these are liquid diet products, artificial sweeteners
and vitamins.
(d) Nothing contained within section 1115(a)(1) of the Tax Law or this
section shall be construed as exempting food or drink from the tax imposed under
subdivision (d) of section 1105 of the Tax Law. (See section 527.8 of this Title.)
....
Section 528.4(b)(3) of the Sales and Use Tax Regulations provides:
Products consumed by humans for the preservation of health include other
substances used internally or externally, which are not ordinarily considered drugs
or medicines.
Example 1: Analgesics, antiseptics, antacids, cough and cold remedies,
laxatives, aspirin, boric acid ointment, cod liver oil and castor oil are exempt.
Example 2: Antibiotics, sulfa drugs, and birth control pills are exempt.
Example 3: Insulin that is packaged with disposable syringes is exempt.

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Example 4: Acne preparations, including acne soaps, are exempt provided
they contain a recognized drug or medicine.
Example 5: All dandruff preparations, including dandruff shampoos, are
exempt provided they contain a recognized drug or medicine.
Example 6: Any diagnostic drug, chemical or other substance which is used
internally or externally on a human, such as a barium product for gastric
X-rays, is exempt.
Example 7: Vaginal creams, foams, ointments, douches, jellies, powder, and
sprays provided they function as treatments for specific conditions are
exempt, but products that only deodorize are taxable.
Example 8: Foot powders that eliminate excessive perspiration and prevent
athletes foot or other fungus infections are exempt, but foot powders which
act only as deodorants are taxable.
Example 9: Lip ice that treats or prevents chapped lips is exempt, but
products that color the lips are taxable.
Example 10: Products used to kill lice which infest humans are exempt.
Similar products which prevent or treat mange or ringworm in humans are
also exempt.
Example 11: Products used for treatment of burns and products used to
relieve pain from burns are exempt.
Example 12: Gelatin capsules, blood and its derivatives are exempt.
Example 13: Medical oxygen and nitrous oxide are exempt.
Opinion
Petitioner sells its wheat grass juice and vegetable juices in individual serving portions. The
wheat grass juice is sold in an individual serving size container from which the patron can directly
consume its contents. The vegetable juices are served in a cup. In both cases, the juices are
generally consumed by Petitioner’s patrons on Petitioner’s premises immediately after their
preparation. In some instances, a cover or lid may be provided for the container or cup so that the
patron may remove the juice from Petitioner’s premises.
Under Section 1115(a)(3) of the Tax Law, products consumed by humans for the
preservation of health are exempt from sales and use tax. Section 1105(a) of the Tax Law imposes

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sales tax on the retail sale of tangible personal property. Section 1115(a)(1) of the Tax Law contains
an exemption for “[f]ood, food products, beverages, dietary foods and health supplements” from
such tax. Thus, when Section 1115(a)(3) exempts not only “[d]rugs and medicines intended for use
. . . in the cure, mitigation, treatment or prevention of illnesses . . . in human beings,” but also
“products consumed by humans for the preservation of health,” it is intended to cover products that
preserve health in a manner similar to drugs and other medicines, but different from the manner in
which food and food products preserve health. This means that the phrase “products consumed by
humans ” in Section 1115(a)(3) must be referring to products that preserve health other than through
their nutrient value. Petitioner’s wheat grass juice and vegetable juices are not the type of items
contemplated by the phrase “[p]roducts consumed by humans for the preservation of health” as
described in Section 528.4(b)(3) of the Sales and Use Tax Regulations. Sales of such juices,
therefore, are not exempt under Section 1115(a)(3).
Petitioner’s wheat grass juice and vegetable juices may, however, be exempt under Section
1115(a)(1) of the Tax Law. Petitioner’s products qualify as exempt beverages as described in
Section 528.2(b)(5) of the Sales and Use Tax Regulations. Nevertheless, Petitioner’s sales of its
products may be subject to sales tax under Section 1105(d) of the Tax Law. See Section 1115(a)(1)
of the Tax Law and Section 528.2(d) of the Sales and Use Tax Regulations.
Section 1105(d)(i)(1) of the Tax Law provides that sales of food or drink are taxable in all
instances where the sale is for consumption on the premises where sold. Section 1105(d)(i)(3)
provides that sales of food or drink are taxable in those instances where the sale is for consumption
off the premises of the vendor unless (other than sandwiches) 1) the food or drink is sold in an
unheated state, and 2) the food or drink is of a type commonly sold for consumption off the premises
and in the same form and condition, quantities and packaging, in establishments which are food
stores other than those principally engaged in selling foods prepared and ready to be eaten.
Accordingly, all sales of wheat grass juice and vegetable juice for consumption on
Petitioner’s premises are subject to sales tax. Sales of these beverages intended for consumption off
Petitioner’s premises may be exempt provided that the conditions set forth in Section 1105(d)(i)(3)
of the Tax Law are met. Petitioner should maintain records sufficient to independently verify each
sale intended for consumption off of Petitioner’s premises. See Section 1132(c) of the Tax Law and
Section 533.2 of the Sales and Use Tax Regulations. Petitioner’s sales of wheat grass juice and
vegetable juice for off premises consumption in cups or similar containers do not appear to be sold
in the same form and condition, quantities and packaging as in grocery stores or other establishments
which are food stores other than those principally engaged in selling foods prepared and ready to
be eaten. It appears, therefore, from the facts in this Advisory Opinion that Petitioner’s sales of
wheat grass juice and vegetable juice for off premises consumption do not satisfy the conditions of
Section 1105(d)(i)(3) and are subject to sales tax.
If Petitioner’s sales of wheat grass juice and vegetable juices which are intended for off
premises consumption meet the conditions set forth in Section 1105(d)(i)(3) of the Tax Law and

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Petitioner maintains records necessary to substantiate the exempt nature of each of those sales,
Petitioner need not collect tax on such sales.

DATED: July 11, 2002

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.