Fun food sales tax facts – Wacky Tax Wednesday
- Sales and Use Tax
- November 21, 2018 | Gail Cole
Tomorrow is Thanksgiving, my favorite holiday. To celebrate, here are seven of my favorite food-related wacky sales tax facts.
Hunker down and eat. To help make life more bearable during the long winter months, or at least more affordable, some towns in Alaska lower the sales tax rate on non-prepared foods.
For the birds. Each person can bring one turkey (fresh, frozen, or chilled) weighing up to 20 kilograms into Canada duty-free, but tuck any more of them under your wings and you’ll have to pay a duty on them.
This or that. The taxability of a sandwich may depend on whether it’s warm or cold, whole or sliced, seller-prepared or not, and even how and where it’s consumed. For example, cold sandwiches “sold by vendors passing among the passengers or spectators where the food products are not for consumption at tables, chairs, or counters, etc.” are exempt in California, while sandwiches “sold in a form for consumption at tables, chairs, or counters, or from trays, glasses, dishes, or other tableware provided by the retailers” are taxable.
Buns on the brain. “Bakery products … sold in units of six or more” are exempt in Massachusetts when sold by a restaurant for off-premises consumption. But when “sold by a restaurant whose principal business is the preparation or sale of such items in such form as to be available for immediate consumption without further significant preparation, whether for on or off premise consumption,” sales of prepared meals and other food combinations are taxed.
The state/local divide. In Colorado, city and county sales taxes don’t necessarily apply to sales of prepared salads and salad bar items that are subject to the state sales tax.
Size matters. The taxability of ice cream often depends on the size of the serving. In California, Florida, and Maryland, a pint of ice cream is subject to sales tax because it’s considered “a size which ordinarily may be immediately consumed by one person.” My kind of people. But in Illinois, a pint of ice cream is taxed at the reduced rate that applies to most grocery items, not the higher rate applicable to “ice cream items in individual sizes” and other foods “prepared for immediate consumption.” Does no one in Illinois put away a pint of ice cream at one go?
Pumpkin eater. To know whether to tax the sale of a pumpkin, sellers in Iowa used to have to quiz consumers on their intentions . Pumpkins purchased for consumption were exempt, while those purchased for other purposes (e.g., to be carved, painted, or simply used as decoration) were taxed. I like to imagine the conversation: “What are your intentions with this pumpkin, ma’am?”