When there’s a little sugar in your bowl – Wacky Tax Wednesday
- Sales and Use Tax
- Sep 4, 2019 | Gail Cole
Have you ever tested yourself for the PTC gene? You put litmus paper coated in the crystalline compoound PTC on your tongue and if you don’t taste anything, you’re a “non-taster” and probably enjoy bitter-tasting foods like arugula and black coffee. If you experience a foul bitter flavor, you’re a “taster” and may find those foods unappetizing. It’s fascinating and helps explain why I adore arugula, drink buckets of black coffee, and have friends who take pains to avoid both.
This came to mind when I read the following on the Washington Department of Revenue website: “Prepared food is generally subject to retail sales tax (RCW 82.08.0293). However, the law provides an exception for certain types of prepared foods, like sweet bakery items.”
What if what tastes sweet to me doesn’t taste sweet to you?
According to the department, “Sales tax exempt bakery items include items filled with jelly, cream, fruit, or other sweet filling, such as pastries, donuts, croissants, pies, [and] cakes. Sweet bakery items usually have the taste or flavor characteristics of sugar or honey.”
The department’s Bakeries page explains, “Bakery items that do not qualify for the exemption tend to be savory items, and may include meat, cheese, and/or vegetable filled foods such as pizzas, calzones, quiches, piroshkies, sandwiches, or other baked goods consumed as a meal.” Meaning a chocolate croissant would be exempt, and a ham-and-cheese croissant would be taxable? What about a plain croissant?
And get this: A baked good can contain sugar and still be considered savory. Again, according to the department: “Savory bakery items do not focus on a sugary taste, even though sugar may be an ingredient.”
There are sweeteners in just about everything these days, so basing an exemption on the presence of sugar probably doesn’t make sense if you want some baked goods to be taxable. However, what is sweetness based on if not specific ingredients? Taste? Seems a bit too subjective for sales tax.
Our sweet taste receptors may vary less than others, but they can still evolve: Many treats that once made me swoon are too sweet for me today. Also, tastes don’t just change over time. According to the Genetic Science Learning Center at the University of Utah, “Some people may find that they can taste PTC on some days, but not others.”
My point is, the inclusion of “sweetness” could be confusing. The owner of a bakery could consider a plain croissant savory and tax it. A customer (or auditor) could argue that it’s sweet and should be exempt.
Furthermore, the law doesn’t even mention “sweet.” It merely states that taxable “prepared food” doesn’t include bakery items such as “bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars, cookies, or tortillas.” The Washington Department of Revenue added the bit about how exempt bakery items “tend to be sweet.”
I’m sure it had its reasons, but it seems to complicate taxability determination. The only thing that’s clear is that when eating utensils are provided with a bakery item, tax applies no matter how sweet it is.
So, what’s a seller of baked goods to do? When in doubt, the Washington Department of Revenue advises taxpayers to request a tax ruling.
Another option: Automate sales tax compliance. It helps ensure you tax the taxable and exempt the exempt, no matter what you sell or where you sell it.