We enjoyed an early Valentine's today! New food tax shocked us! - Luxury Coach Lifestyles
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Old 02-14-2013, 06:19 AM   #1
Jack Fouts
Join Date: Feb 2008
Posts: 93
Default We enjoyed an early Valentine's today! New food tax shocked us!

The misses and I went out and enjoyed a nice meal at one of favorite steak houses for Valentine's on the 13th instead of the 14th. We figured we would try and beat a mad house on the 14th. It was still quite busy. The establishment added a new food tax of about $8 plus regular sales tax to the bill. With our $94.31 ticket having this extra amount of $15 to $16 dollars included plus the $20 tip, it made our nice meal of $115 seem quite high. I'm not complaining, we did enjoy the time greatly. But why this new extra tax? I hadn't experienced anything like this yet.

J. Fouts

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Old 03-23-2013, 10:27 PM   #2
Senior Member
Join Date: Jul 2012
Location: Missoula, Montana
Posts: 281

I agree there is to much tax! Food regardless if it is prepared or not should not be taxed. Aren't we taxed enough?

Sales taxes imposed by state governments vary from state to state not only in rate, but also in what is subject to the tax. Many states (but not all) exclude food for home consumption from sales tax.

However, foods purchased in restaurants and prepared foods are often not exempt from sales tax. Consequently, the restaurant must collect sales tax from the patrons.

[h=1]The Cost of Dining Out: Meals Taxes in Major U.S. Cities[/h]Washington, DC, March 1, 2012-As many tourists and business travelers have learned, taxes on meals are sometimes higher than taxes on other goods. Of the 50 largest U.S. cities, 15 charge an additional meals tax on top of the regular sales tax, according to a new analysis by the Tax Foundation. The combined rates are highest in Minneapolis, Chicago, Virginia Beach, Seattle, and Washington, D.C. Meals taxes generally apply to purchases of prepared food that are consumed either in a restaurant or taken to go for later consumption. In contrast, sales of groceries (or "non-prepared food") are completely exempt from state sales tax in 30 states and the District of Columbia and partly exempt in a further eight states. Meals taxes are usually locally imposed but are sometimes imposed at the state level.

"High taxes on prepared food are sometimes justified as a luxury tax intended to target higher-income individuals, although the diversity of takeout dining options suggests that such a tax is poorly targeted to achieve that goal," said Tax Foundation Vice President for State Projects Joseph Henchman. "One could say that it is a tax on individuals with less flexible schedules or who do not like to cook - rich or poor."

The additional meals tax rate in the top 50 cities can vary dramatically. Milwaukee, Wisconsin boasts the most modest add-on rate of 0.05%, while Denver and Washington, D.C. have the second-highest rate at 4%. Visitors to Virginia Beach, Virginia see the largest increase from the regular sales tax rate to the combined total: a 110% jump from 5% to 10.5%.
Such taxes are sometimes justified as "tourism" taxes, designed to shift tax burdens to business and vacation travelers, similar to high taxes on hotel rooms and car rentals. Because the benefit derived from added economic activity from visitors and travelers probably exceeds the government services they use during their stay, tourism taxes are generally bad policy because they shift tax burdens away from those residents who actually demand and benefit from government services.

Meals taxes can also add significant costs and lead to administrative complexity. According to the Massachusetts Department of Revenue, ordering lasagna for dinner in a restaurant is taxable, but if the same restaurant were to also sell a frozen lasagna dinner to be reheated at home, it would be exempt. Also, buying a pizza and two cans of soda is subject to the meals tax, but if the pizza is ordered to go with a two-liter bottle, the soda is exempt from the tax because it is "an unopened original container of at least 26 fluid ounces."

The Cost of Dining Out: Meals Taxes in Major U.S. Cities | Tax Foundation
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