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Tax on many food items will increase on Oct. 1

There's a new advisory out from the state Department of Revenue Services about the so-called 'meals tax' included in the budget, which takes effect October 1st.  The tax on prepared food items at restaurants, a 1-percent increase to 7.35-percent, will apply to items sold in grocery stores considered eating establishments.

Senate Minority Leader Len Fasano doesn't buy the Governor's parity argument.  He argues that those stores were already taxed.  Fasano says the quantities are also arbitrary.  He noted that the tax applies to five rolls, but not six.

Fasano says the tax increase was sold as being something that people could afford, if they were going out to dinner.  But he says that's not how it is being interpreted by DRS. The document clarifies that the total 7.35-percent tax rate will also be effective in grocery stores, “which previously taxed meals in a different manner than other eating establishments.”

DRS Examples of Taxable “Meals” (taxed at 7.35% in eating establishments AND grocery stores):

·         Sandwiches, grinders, and wraps;

·         Popsicles, ice cream cones, cups, sundaes, and other individual servings of frozen desserts unless sold in factory prepackaged multi-unit packs;

·         Ice cream, frozen yogurt, and other frozen desserts sold in containers of less than one pint;

·         Salads sold at salad bars;

·         Lettuce or greens-based salads sold in containers of 8 ounces or less;

·         Salads that are not greens-based (macaroni, potato, pasta, fruit, etc.) sold in containers of 8 ounces or less;

·         Donuts, muffins, rolls, bagels, and pastries (5 or fewer);

·         Cookies sold loose (5 or fewer when cookies are sold by quantity, or less than 8 ounces when cookies are sold by weight);

·         Pies or cakes by the slice;

·         Prepackaged or factory-sealed bags or packages of 5 ounces or less of chips, popcorn, kettle corn, nuts, trail mix, crackers, cookies, snack cakes, or other snack foods, unless sold in factory prepackaged multi-unit packs;

·         Pizza, whole or by the slice;

·         Cooked chicken sold by the piece, including buckets of chicken, and whole cooked chickens;

·         Cooked ribs sold by the piece or portion and whole racks of ribs;

·         Hot dogs served on a bun or heated;

·         Bagels that are individually prepared;

·         Soup sold in containers of 8 ounces or less, unless sold in factory prepackaged units;

·         Smoothies;

·         Meal replacement bars;

·         All beverages provided with the sale of a taxable meal;

·         Food sold at a hot buffet;

·         Food that is cooked to order;

·         Popcorn, kettle corn, nuts and any other snack foods that are kept warm for purchase; and

·         Items such as salads, side dishes, and rolls, when sold as part of family pack meals typically including, whole chickens or buckets of chicken, when prepared and sold for immediate consumption, even when the items exceed the weight or quantity limits specified above

DRS Examples of Taxable Drinks (taxed at 7.35% in eating establishments AND grocery stores):

·         Beer, including nonalcoholic beer;

·         Fruit juices, sweetened beverages, soft drinks, and soda;

·         Carbonated water;

·         Coffee or tea (ready to consume, hot or iced);

·         Distilled alcohol such as brandy, rum, whiskey, gin, vodka, and tequila;

·         Fountain drinks of any kind;

·         Hard cider;

·         Kombucha tea, and other naturally carbonated beverages;

·         Malt liquor;

·         Milkshakes;

·         Hot chocolate;

·         Syrup-flavored crushed ice drinks;

·         & Wine