It’s July 4th, a day of family gatherings, fireworks and grilled goodies.
For most of us, that’s hot dogs and hamburgers.
And for most of us, our home-grilled meats and toasted buns are tax-free. That’s fitting, since Independence Day was sparked by the belief that taxation without representation is tyranny.
Only a handful of states tax groceries.
However, if you opt to buy your hot dogs or hamburgers ready-made, you’ll likely pay sales tax on those eats.
States that collect sales tax on consumer purchases — that’s 45 out of 50, plus the District of Columbia; plus, 38 of those states allow for added local sales taxes — impose levies on prepared and/or take-out meals.
Here are some examples.
Tasty Texas: “Food is also taxable when served in restaurants and similar places of business,” says the Lone Star State’s Comptroller of Public Accounts.
To help consumers determine which eats are taxable, the Texas comptroller offers some guidelines. For example, food items are taxable if they are prepared and sold with eating utensils; kept hot, such as barbecued chicken (whether whole or pieces), chili and soups; ready-to-eat sandwiches (but not frozen sandwiches); and sold ready for immediate consumption from pushcarts, cars and trucks, or any other vehicle.
Meals in Massachusetts: For our food purposes on this Fourth of July, the Bay State’s Department of Revenue says that any heated prepared food item is subject to its sales tax on meals.
That specifically applies to Massachusetts’ convenience store sales of, among other edibles, “single-portion entrees such as lasagna, eggplant parmesan or quiche, heated, or refrigerated if the store provides a heating unit, and whether or not prepackaged.”
The same tax rule applies to quick meals, which Massachusetts tax officials say are food items that are
…prepared for immediate consumption such as hot dogs, hamburgers, pizza slices or soup, if heated. These items are also taxable when refrigerated if the store provides heating units (typically microwave ovens) in which customers may heat the quick meal. Quick meals sold frozen are not taxable. The sale of sandwiches is taxable whether prepackaged or heated.
Empire State edibles: In New York, home to the famous Big Apple hot dog carts, tax officials say that sandwiches are generally subject to sales tax.
OK then, you’re clear here, right, when it comes to hot dogs? Wrong.
While the National Hot Dog and Sausage Council says that the terms hot dog and sandwich are not interchangeable, New York disagrees, at least for tax purposes.
According to the NY Department of Taxation and Finance, “Sandwiches include cold and hot sandwiches of every kind that are prepared and ready to be eaten, whether made on bread, on bagels, on rolls, in pitas, in wraps, or otherwise, and regardless of the filling or number of layers. A sandwich can be as simple as a buttered bagel or roll, or as elaborate as a six-foot, toasted submarine sandwich.”
And among the NY tax office’s examples of taxable sandwiches are “hot dogs and sausages on buns, rolls, etc.”
Grill yourself: So the tax lesson for most of us on this July 4th is to cook our hot dogs and hamburgers at home.
And remember that if you pick up one more dog on the way back from tonight’s fireworks show, you’ll probably pay sales on the pre-cooked treat.
If that’s an issue for you, or you just want to double check, touch base with your state tax department. Note, though, you won’t be able to get your answer until tomorrow, since state and federal offices are closed today to celebrate America’s 240th birthday.
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