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Ezel / Tax Rulings / TX
TX 8601L0781G01 Sales and/or Use Tax (State,Local,MTA) 1986-01-13

Which muffins, milk, and other beverages sold by a takeout shop were subject to Texas sales tax?

Short answer: Heated muffins and beverages sold in cups were taxable; unheated muffins sold without utensils and milk sold in cartons were not taxable.

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This page answers the general question as of 1986. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1986
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1986 Texas Comptroller taxpayer-response letter based on a takeout-only business with no tables, trays, benches, or booths. It distinguishes heated and unheated muffins, eating utensils, beverages sold in cups, and milk sold in cartons. It expressly says different facts could change the opinion. Current food, beverage, takeout, heating, utensil, and sales-tax rules may differ, and STAR documents may no longer represent current policy even when not marked superseded. Letters on STAR can support detrimental reliance only for the taxpayer to whom the letter was directly issued under 34 Tex. Admin. Code Rules 3.1 and 3.10. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The shop was takeout-only and provided no tables, trays, benches, or booths. The Comptroller said coffee, tea, iced tea, sodas, fruit juices, hot chocolate, and milk sold in a cup were taxable. Milk sold in a carton was not taxable.

Muffins heated by employees were taxable. Muffins not heated by employees and sold without eating utensils were not taxable.

Common questions

Were muffins always taxable? No. Employee-heated muffins were taxable, while unheated muffins sold without utensils were not.

Was milk taxable? Milk in a cup was taxable; milk in a carton was not.

What other drinks were taxable? The letter listed coffee, tea, iced tea, sodas, fruit juices, and hot chocolate.

Citations and references

  • Texas Comptroller Rule 3.293 — food, food products, meals, and food service.

Source

Original ruling text

January 13, 1986

Dear ***:

Thank you for your letter of December 18, 1985, concerning the taxability
of your product.

I understand that your facilities are take out, no eating facilities;
i.e. tables, trays, benches, or booths; provided.

Tax is due on the coffee, tea, iced tea, sodas, fruit juices, hot chocolate,
and milk sold in a cup. Tax is not due on milk sold in a carton.

Tax is due on muffins sold and heated by your employees. Tax is not due
on muffins not heated by your employees and sold without eating utensils
(see attached Limited Sales and Use Tax Rule 3.293, Food; Food Products;
Meals; Food Service).

All tax collected from your customers must be remitted to the state.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write us at the Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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