Massachusetts Salad Sales Tax
- Feb 22, 2012 | Will Frei
Food taxability continues to baffle businesses. The latest evidence comes from the Massachusetts Department of Revenue, in a letter ruling clarifying the taxability of prepackaged salads.
The ruling responds to a query from a Massachusetts supermarket: Are the prepackaged individual salads sold at our deli subject to sales tax? The answer: " . . . it is ruled that sales of the salads at issue are subject to the Massachusetts sales tax."
Why the confusion? Under Massachusetts' General Law, "sales of food products for human consumption are exempt from sales tax," while " . . . meals sold by restaurants are taxable" (emphasis added).
According to the Massachusetts Department of Revenue, the salads are meals. "The determinative factors in concluding that the salads at issue here are taxable are . . . that (1) the salads are packaged in a quantity appropriate for consumption by one individual, (2) the salads contain combinations of 'fixings' or food items, and (3) the salads are packaged in a manner that provides ease of immediate consumption."
Although the Massachusetts ruling has nothing to do with health, it is interesting to note that some states tax "unhealthy" food items at a higher rate in order to fight obesity. The various definitions and taxes associated with food continue to make this topic a difficult one for businesses to swallow.