Homebrew Ingredients sales tax

[msjulian]

Just for my own curiosity I emailed the Indiana Dept of Revenue about sales tax on raw ingredients sold by homebrew stores. I was wonder if they were considered sales tax exempt after purchasing some grain in Louisville and not being charged sales tax. This is the email that I got as a reply. Seems like Co-op and Weber do not need to charge the 7% on the raw ingredients...

Dear Michael Julian:

Yes, the raw food goods will be considered tax exempt.

Cheryl Jones, Tax Analyst
Tax Administration Business
Indiana Department of Revenue
100 N Senate N105/MS#112
Indianapolis, IN 46204
317-233-4015

Please note that the opinions expressed in this e-mail are those of the writer and therefore not binding on the Department.


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From: Michael Julian[SMTP:MSJULIAN@WOWWAY.COM]
Sent: Monday, August 26, 2013 9:45:54 AM
To: DOR Webmaster
Subject: AFSS - Sales Tax
Auto forwarded by a Rule

Your Name: Michael Julian
Email Address: msjulian@wowway.com
Subject: Sales Tax
Your Comments:
I was looking for information on food items that would be exempt fromsales tax. I am looking to open a homebrew and wine making supplystore in the Evansville IN area. A lot of the items I will be sellingare "raw" food goods. Things like raw barley and wheat grain. Hopswhich are a vine grown vegetable and then packaged for cooking.Brewers yeast used to ferment, extract syrups and spices . I lookedonline and found INFORMATION BULLETIN #29 and it lists a few of theitems outright. I was looking for an answer on the raw grain andyeast. I would sell it either milled or unmilled by weight and the rawyeast in freeze dried and liquid form.

[BREWsmith]

Is malted grain considered raw grain?

[msjulian]

Should be no different then rolled oats, wheat germ or roasted nuts. Barley by definition is classified as a cereal.

Generally, the sale of food and food ingredients for human consumption is exempt from Indiana sales tax. Primarily, the exemption is limited to the sale of food and food ingredients commonly referred to as "grocery" food. The purpose of this bulletin is to assist Indiana retailers in the proper application of this exemption.

I. Non-taxable Food Items
Food is defined as substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated
form, that are sold for ingestion or chewing by humans and that are consumed for their taste or
nutritional value. The term does not include tobacco, alcoholic beverages, candy, dietary
supplements, or soft drinks.


Here are a few items that are on the tax exempt list.

Cereal and cereal products
Extracts and flavorings intended as cooking ingredients
Flour (including barley, buckwheat, corn, rice, rye, soy, wheat, whole wheat, or other forms of milled grains or nuts)
Food sold by weight or volume as a single item
Spices
Vegetables and vegetable products (whether fresh, frozen, canned, or dehydrated)

If I was selling homebrew supplies I would be looking for any edge I could get over the online stores. Knocking 7% off the cost of raw goods would be a big plus.

[Blancaster]

That is pretty interesting. Would be great if the shops here new this and cut the sales tax out!


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