Minnesota Clarifies What Counts as Taxable Candy | TaxValet

Minnesota’s Department of Revenue has updated its guidance on which sweet treats are subject to sales tax. Businesses selling snacks in the state should take note—especially if you sell items that might seem like candy, but technically aren’t.

Who This Impacts: Retailers and Food Sellers Offering Sweet Snacks in Minnesota

If you sell candy, nutrition bars, or other snack items in Minnesota—whether in stores, online, or through vending machines—this update directly impacts how you apply sales tax. Misclassifying products could lead to compliance issues or unexpected liabilities down the line.

What’s Changing: Clarification on What Counts as Candy (and What Doesn’t)

Taxable Candy Defined

According to Minnesota’s rules, “candy” is a preparation of sweeteners combined with chocolate, fruits, nuts, or flavorings, in the form of bars, drops, or pieces. These items are taxable unless they meet specific exemptions.

Examples of taxable candy include:

• Candy bars
  
  
• Chocolate chips and coated nuts
  
  
• Gum and mints
  
  
• Marshmallows and peanut brittle
  
  
• Caramel apples and corn
  
  
• Fruit roll-ups
  
  
• Yogurt- or carob-covered snacks
  
  

What Isn’t Considered Candy

A product is not considered candy (and is not taxable as candy) if:

• It contains flour (such as wheat, rice, or corn flour).
  
  
• It requires refrigeration, like an ice cream bar.
  
  

Also, cotton candy isn’t classified as candy because it isn’t in bar, drop, or piece form—but it’s still taxable if prepared by the seller.

Special Note on Edible Cannabinoids

Edible cannabinoid products are taxed differently:

• 10% Cannabis Tax
  
  
• 6.875% Minnesota state sales tax
  
  
• Any applicable local sales tax

What You Should Do Next: Review Your Product List and Labels

Retailers and manufacturers should:

• Revisit product ingredient labels for flour content.
  
  
• Review storage requirements (especially refrigeration).
  
  
• Update point-of-sale systems to reflect the proper taxability.
  
  
• Pay special attention to vending machine sales—they’re taxable in full.
  
  

If you're unsure about a product’s classification, consider reviewing Minnesota Statutes 297A.61, checking the state’s detailed guidance on candy and prepared food, or consulting with a tax attorney.

How TaxValet Simplifies Compliance with Changing Tax Laws

If you’re a TaxValet client, you don’t need to sweat the small print. We stay on top of updates like Minnesota’s candy tax rules, ensuring your product taxability is correctly set up and maintained.

Our team will handle the sales tax research, classification, and filing to help you stay compliant—without the hassle.

Need help managing sales tax compliance across states? Reach out for a free consultation with our team today.