Is a 'Fastbreak Bar' meal-replacement snack bar exempt from Texas sales tax as a food product?

Plain-English summary

A company provided additional information to the Comptroller about its product, referred to in the letter as a "Fastbreak Bar." The key fact: the product is marketed and labeled as a meal replacement. Based on that marketing and labeling, the Comptroller confirmed the product is a nontaxable food product — no sales tax applies to its sale.

What this means for you

Nutrition bar, meal-replacement, and snack-food manufacturers

How you market and label a food-adjacent product can affect its tax classification. A product marketed and labeled as a meal replacement was treated here as a nontaxable food item, similar to other packaged food products, rather than as a taxable supplement or novelty item.

Accountants and tax professionals

This is a short, fact-specific letter — useful mainly as a data point confirming that meal-replacement marketing/labeling supported nontaxable food treatment for this specific product, rather than as a general rule with reasoning you can extend broadly. The letter doesn't explain what would make a similar product NOT qualify (e.g., if marketed as a supplement or drug rather than food), so don't over-read the holding.

Common questions

Q: Is a meal-replacement bar exempt from Texas sales tax?
A: Per this letter, yes, when marketed and labeled as a meal replacement, it's treated as a nontaxable food product.

Q: Would a similar bar marketed as a "supplement" rather than a "meal replacement" get the same treatment?
A: This letter doesn't address that scenario — it turns specifically on the product being marketed and labeled as a meal replacement.

Citations and references

No specific Tax Code section or Comptroller rule number is cited in this letter; the Comptroller applied its general food-product exemption policy to this specific product based on its marketing and labeling.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9808725L

Original ruling text

August 14, 1998

Dear Ms. **:

Thank you for your July 28rd letter providing additional information concerning
the COMPANY A.

The COMPANY A is marketed and labeled as a meal replacement. Therefore, the
COMPANY A is a nontaxable food product.

This opinion is based on the facts you submitted. Other facts, though similar,
may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct line is
512/475-0030. You may also write to Tax Policy, Comptroller of Public
Accounts.

Sincerely,

David Somerville
Tax Policy Division