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Pennsylvania Sales Tax: Strange But True

  • Jul 16, 2013 | Gail Cole

 Tax-free in Pennsylvania: unsweetened iced tea.

Sometimes sales tax law can be strange. So strange, in fact, that even people who work in sales tax can't keep it all straight. Take tea in Pennsylvania.

According to Elizabeth Brassell of the Department of Revenue, "The only time tea isn't taxable is when you buy powder or tea bags from the grocery store."

That was before Ms. Brassell was told of a tip offered by an employee of Wawa convenience store: when purchasing iced tea from the soda fountain, be sure it is rung up "as iced tea and not a soft drink." Why? "It'll save you 9 cents in tax."

Alerted to this puzzling phenomenon, Ms. Brassell did some research and discovered that the Wawa employee was right. As she told the folks from The Morning Call newspaper:

"It turns out that you have stumbled upon another nuance in our sales tax code. Turns out that brewed tea, so long as it's not hot tea, is not subject to sales tax. So if you go to Wawa and you buy a hot tea, you will pay sales tax on it. But the clerk was correct in telling you that there is no sales tax on the cold-brewed tea."

The Fine Print

Wow. Hot tea is taxable and cold tea is exempt. But only "cold-brewed tea that comes out of a dispenser separate from the soda fountain." The Morning Call points out that bottles of iced tea are taxable, and "so is sweetened iced tea that comes out of the soda fountain."

What About Coffee?

Iced-coffee drinkers are out of luck, because "this bizarre tax loophole does not apply…."

Consumers of fountain iced tea are advised to "keep your iced-tea receipts if you are charged tax, and you can apply to the state Revenue Department's Board of Appeal for a refund…." Over time, 9 cents per iced tea can really add up.

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photo credit: Pen Waggener via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.