A Second Slice at the Bagel Tax

The tax madness just never stops.  A few months ago I wrote a post about the complexity of bagel taxation.  Hopefully, you’ve had time to digest it.

 

Bagels and.... tax?

But just when you think the confusion surrounding the taxation of prepared vs. unprepared foods has been cleared up… you stumble across a story like this one by WNYT.

So… in the previous discussion, the Department of Taxation and Finance (DTF) was aggressively going after bagel shops that were not collecting sales tax when they should.

Now, we’ve got a Dunkin’ Donuts franchise collecting sales tax when they shouldn’t.

Many people, including a source for WNYT’s story, would blame the franchise because a store clerk made a mistake in charging customers sales tax when the sale should have been tax-free.

The heck with that.  I lay the blame squarely where it belongs:  at the creation and enforcement of ridiculous tax code.  The tax code is nonsensical.  You can buy a bag o’ sliced bread at the grocery store without paying sales tax.  But the moment you get your bagel sliced at your favorite breakfast nook… “ding” goes the sales tax cash register.

But that’s not the end of my rant.  Check out this portion of WNYT’s story:

It’s important to point out, Dunkin’ Donuts doesn’t pocket the extra money.  Because it’s charged as sales tax, it goes directly to the county and state.

So, let me get this straight.  If a business collects too little sales tax, the DTF comes after them.  If they collect too much, the money stays with the state and county.

Either way, the taxpayer foots the bagel bill.

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4 Comments

  1. I’ve seen on several McDonalds receipts a line for “eat in tax” or “take out tax”. I never understood how it makes a difference if the same food is served in a tray or paper bag. What is stopping me for asking it to go, and eating it inside the restaurant anyway?

    Reply
    • Probably nothing stopping you from doing that, though I suppose the restaurant could take some flak if the DTF discovered it was happening.

      Ridiculous, though, that it makes a difference. Just another way for the state/county to grab more bucks from taxpayers.

      Reply
  2. springtimesoul

     /  January 19, 2011

    New math: Bill and Bob buy the same number of bagels at the bagel shop. Bill pays $9.24 for his unsliced bagels. How much does Bob pay for his sliced bagels? a) $9.24 b)$9.98 c)nothing–Bob’s a thief d)none of the above because you can no longer buy sliced bagels in NY

    Reply
    • Answer: e) none of the above because Bob moves out of state to escape the crazy sales tax, not to mention the excessive property taxes.

      Reply

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