Is a flash-dried fruit and vegetable product sold in capsule form ('Juice Plus+') exempt from Texas sales tax as a food product?

Subject

Fruits And Vegetables — Flash — Dried And Sold In Capsules — Exempt As Food Products

Plain-English summary

A taxpayer asked the Comptroller's office whether "Juice Plus+" — a product described as flash-dried fruit and vegetables in capsule form, marketed as a completely natural whole food concentrate — is subject to Texas sales tax.

The Comptroller responded that as long as the capsules are made of pure fruit or pure vegetable products, they are exempt as a food product rather than taxable. The ruling notes that this conclusion is based on the facts presented and could change if the facts were different.

What this means for you

Sellers of dried or concentrated produce products

If you sell a product made entirely of dried or concentrated fruit or vegetables — even packaged in a non-traditional form such as capsules — it can qualify for Texas's food product exemption, so long as the product remains pure fruit or pure vegetable with nothing added that would take it outside that category.

Businesses selling dietary supplements or "whole food" products

Not every capsule or pill-form product automatically counts as a taxable supplement. The processing method (in this case, flash-drying) and the packaging form (capsules) did not disqualify the product from the food exemption; what mattered to the Comptroller was that the ingredients were pure fruit or vegetable.

Accountants and tax professionals

This letter is a useful, fact-specific example of the food product exemption being applied to a non-traditional food format. Because the ruling turns entirely on the product being "pure fruit or pure vegetable," any product containing other ingredients (fillers, additives, other supplements) would need a fresh analysis and shouldn't be assumed to be covered by this letter.

Common questions

Q: Is Juice Plus+ (flash-dried fruit and vegetable capsules) taxable in Texas?
A: No. The Comptroller ruled it is exempt as a food product, as long as the capsules are pure fruit or pure vegetable products.

Q: Does selling a food product in capsule form change its tax treatment?
A: Not by itself, according to this letter. The exemption turned on the product being pure fruit or vegetable, not on its packaging or capsule form.

Q: Would this ruling cover a similar product with added ingredients (e.g., vitamins, binders, or other supplements)?
A: The letter doesn't address that scenario. The Comptroller's answer was expressly conditioned on the capsules being "pure fruit or pure vegetable products," and the ruling states the opinion could change on different facts.

Citations and references

No specific statutes or administrative rules are cited in the text of this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9411L1340A01

Original ruling text

November 18, 1994

Dear *****:

I have received your correspondence regarding the taxability of "Juice
Plus+".

Facts: You describe "Juice Plus+" as flash-dried fruit and vegetables in
capsule form. You state that it is a completely natural whole food
concentrate.

Question: You ask if this product is taxable.

Response: As long as these capsules are pure fruit or pure vegetable
products, it is exempt as a food product.

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

You may call me toll free at 1-800-531-5441, ext. 3-4663. My direct line
is 512/463-4663. You may also write to Tax Administration Division,
Comptroller of Public Accounts.

Sincerely,

Joan Hale
Tax Administration Division

NOTE: Previous Accession Number 9411977L