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Sales tax on food creates Mass. confusion

Posted by Mitch Lipka  November 12, 2013 11:08 PM

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salad.JPGQ. Whole Foods charges sales tax on loose bagels (up to six), the salad bar, and some herbal teas. I can understand paying tax if I’m eating there, but when part of a large grocery order and not being consumed there, it doesn’t make sense. I was told that herbal teas were considered a health supplement, bagels were considered a “restaurant” item unless prepackaged, and anything in any of their salad bars was considered a “restaurant” item. Are they right or are they charging more sales tax than necessary?
Lynda Costello, Dedham

A. Those questions, or similar ones, come up all the time. So, it’s worth revisiting this issue since it clearly confuses people.

There are lots of rules about what is included and excluded from the sales tax when it comes to food. The exemptions vary depending on the type of food, how it is prepared, and where. General grocery items – the things you’d buy to stock your pantry or make meals at home – are exempt.

But it appears that Whole Foods correctly applied sales tax to the items you mentioned.

Let’s start with bagels and the salad bar. Bakeries at grocery stores are not always created equal. If they sell items that are typical of coffee shops or lunch counters, such as drinks and sandwiches, they have to charge sales tax (like any other restaurant) unless they separate that area from the rest of the store. If they did, that would allow regular bakery items to be sold without tax.

But, if the bakery section is integrated into the store, as at most supermarkets, only baked good sold in groups of six or more would be exempt from sales tax.

At the salad bar, food is prepared for consumption – just like at a restaurant – so that would also be subject to sales tax. Those rules help level the playing field for restaurants so you don’t end up receiving a 6.25 percent discount by buying tonight’s dinner (ready to eat) at the grocery store. If you make it yourself you’ll avoid the tax.

As for herbal teas, some are marketed as supplements – whether for digestion or sleep (they don’t actually contain tea, but rather herbs) – and supplements are taxable. Hopefully, all this is digestible.

This blog is not written or edited by Boston.com or the Boston Globe.
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About the author

Mitch Lipka is one of America's leading consumer journalists and advocates. He is an expert in product safety, recalls, scams, and helping consumers get out of jams. He is a nationally known consumer columnist and runs TheConsumerChronicle.com. He lives in Worcester. You can find him on Facebook or reach him at ConsumerNews@Aol.com

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