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How to get your pi(e) on, tax free – Wacky Tax Wednesday

  • Mar 14, 2017 | Gail Cole

pi day, pie, sales tax

March 14 is National Pi Day, and savvy math nerds around the country are celebrating their favorite irrational number by consuming quantities of pie. Sweet or savory, if it comes baked in a crust, Pie Day is a good day to eat it.

There are all sorts of ways to get your pie fix, and some are taxed more than others. We figure the mathematically informed would appreciate this guide to eating pie sales tax free.

Variable rates

Whole pies became a taxable bakery item in Maine on January 1, 2016, but the rate depends on how you buy your pie:

  • Pies baked by a restaurant or store are taxed at 8 percent
  • Pies purchased and resold are taxed at 5.5 percent
  • Pies purchased from the maker at a farmers market and resold in a store are taxed at 5.5 percent, but when the maker sells them at the farmers market, the pies are taxed at 8 percent

To get tax-free pie in Maine, you have to make it yourself or buy one that’s prepared by the retailer but isn’t ready for immediate consumption and requires baking.

Size matters

Portions affect taxability in California. While the sale of a slice of pie is generally taxable, the sale of a whole pie sold without eating utensils or dishes is generally exempt. Since it’s virtually impossible to eat just one piece of pie, you may as well get the whole pie (without utensils) and the exemption.

The size of the portion doesn’t matter in Texas. Although most “ready-to-eat food is typically taxable” when sold to go, bakery items are exempt. The exemption applies to individual portions or whole pies (fresh or frozen), provided they’re “sold without plates or eating utensils.”

Does it come with a fork?

Likewise, bakery items in Michigan are exempt from sales and use tax when sold without eating utensils. If they’re sold with an eating utensil, they’re subject to sales tax. Remember that if you’re picking up a pie for a Pi Party, and don’t ask for a knife or plastic forks.

How sweet is it?

In Washington, prepared food is generally subject to retail sales tax. Where pies are concerned, taxability depends on whether they’re savory or sweet. Sweet pies (having “the taste or flavor characteristics of sugar or honey”) are generally exempt. Savory pies such as pizza or chicken pot pie don’t generally qualify for that exemption. If you’re not sure if your pie is savory or sweet, you can request a ruling from the Washington Department of Revenue — but let’s hope it never comes to that.

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photo credit: stevendepolo Crane's Pie Pantry Fruit Pies Under the Lights Community Foundation Holland Zeeland Fall Celebration Event via photopin (license)

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.
Avalara Author
Gail Cole
Avalara Author Gail Cole
Gail Cole is a Senior Writer at Avalara. She’s on a mission to uncover unusual tax facts and make complex laws and legislation more digestible for accounting and business professionals.