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Check Your New York City Grocery Store Receipts

  • Sep 30, 2014 | Gail Cole

 Taxable or exempt in NYC?

In the past year, inspectors in New York City have reportedly issued more than 200 violations to grocery stores and supermarkets for “deceptive practices.” The deception? Improper sales tax collection.

According to the New York Post, culprits include such big names as Key Food, ShopRite, Trader Joe’s, Met Foodmarkets, and Whole Foods. These and others reportedly charged customers sales tax on “bread, baked goods and other exempt items.”

The infractions were found during inspections conducted by the New York City Department of Consumers Affairs during the last fiscal year. While I could find no reference to the inspections on the department’s website, I did find the NYC Consumer Affairs New York State Department of Taxation and Finance website in search of sales tax information.

The department’s quick reference guide for taxable and exempt property and services reveals that certain food and drinks are eligible for a “specific exemption” in New York State. Applicable tax bulletins are named. Clues!

Ultimate responsibility

It isn’t easy to discover exactly which foods are taxable and which are exempt in New York. Retailers who sell into multiple states (see the list of grocers above) may find it particularly confusing, as each state has its own, unique tax laws. For example, a burrito is considered a sandwich for tax purposes in New York but it is not a sandwich (for tax purposes) in Massachusetts.

A link on the New York State Department of Taxation and Finance leads to a video that explains New York State Sales Taxable Goods and Services reveals:

  • Food and beverages sold by a grocery store may or may not be taxable, depending on the type of item.
  • Food and beverages sold by a restaurant, tavern or caterer are almost always subject to sales tax.
  • An item or service may be exempt from state sales tax but still subject to a local tax, or vice-verse.
  • Some buyers are exempt from paying sales tax, even if the sale is otherwise taxable.

The video closes with this cautionary statement: “Once registered, be sure to collect and remit the proper amount of sales tax on every taxable sale. Otherwise, you may be ultimately responsible for paying those taxes yourself.”

Nobody ever promised running a business would be easy. That said, it is possible to simplify sales tax. Learn more about automated sales tax software.

photo credit: gtrwndr87 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.