Wacky Sales Tax Facts
Here’s fun food related sales-tax fact. Did you know that if you bought a bagel in New York, you’re exempt from Sales Tax? but with one caveat, it’s not sliced so you’d have to do this yourself. I found out when I was in New York a couple of years ago and decided to stop by a bagel place before heading in for a political technology convention.
The guy at the counter told me that he’d have to charge me more if I needed it “prepared” which seemed a little bizarre to me. Why would you serve an unprepared bagel if that’s your business? If I wanted an unprepared meal I would have gone to Safeway or QFC instead. It wasn’t until I joined Avalara that I found out the reason.
A bagel in New York is considered a grocery item for home consumption which is exempt to sales-tax but for someone to prepare it (in this case slicing it) would incur an additional 8.875% sales-tax because it was served at a commercial establishment. Prepared in this case could also mean sliced or cream cheese applied or sliced, topped with smoked salmon and capers.
If you want to test this out, you could give our APIs a whirl by signing for a free account at /getting-started and making a quick API call.
In order to set that calculation up and to ensure accuracy, you could either setup a custom Tax Code mapping in the Admin Console for a bagel or use the AvaTax system tax code which is PF120012.
Let us know what you find. More wacky sales-tax facts on food in the coming posts.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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