Fun food sales tax facts – Wacky Tax Wednesday

Updated for 2020; first posted in November 2018.

Tomorrow is Thanksgiving, my favorite holiday. It’ll be different this year, since the governor of Washington has prohibited indoor social gatherings with people from outside our household, but we’ll make do.

2020 has been a difficult year, and more challenges lie ahead. To help lighten the mood, here are some of my favorite food-related wacky sales tax tales. 

Bread by any other name. While a rose by any other name may smell just as sweet, naming a baked good “bread” doesn’t make it qualify for a 0% value-added tax (VAT) rate in Ireland.

For here or to go? When restaurant meals are delivered, determining what’s taxable or exempt, and who’s responsible for collecting any tax due, can be as challenging as preparing a 30-course meal for hundreds. 

Life lessons from a lemonade stand. Believe it or not, children who operate lemonade stands in Idaho and Washington are required to get a permit then collect and remit all applicable taxes.

The cranberry vindicated. Dried cranberries have a public relations problem. They’re packed full of antioxidants and nutrients, but because they’re extremely tart, they’re typically sweetened. This has caused them to be categorized — and taxed — as “candy” in approximately half of the United States. Wisconsin thinks it’s time for that to change.

The deduction isn’t in the bag. Sales of groceries generally qualify for a New Mexico gross receipts tax deduction. But when the groceries are delivered, they may not.

Uncorking Utah’s policy on direct-to-consumer (DTC) wine shipments. Utah strictly regulates the sale and import of alcohol, but it’s taking baby steps toward allowing DTC wine shipments. Although it still doesn’t allow residents to purchase wine subscriptions themselves, it's permitting the Utah Department of Alcoholic Beverage Control to purchase wine subscriptions on behalf of interested residents.

What’s in your shopping cart? In Massachusetts, what’s allowed through a grocery store restaurant-area checkout line can impact the taxability of all sales made at that register. 

When a burrito is a sandwich; when it’s not; and why it matters. Eating a sandwich made by someone else is a simple task. Figuring out how that sandwich is taxed can be complicated. 

Bon appétit.