Kitchen

[Toppers3]

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@chickenbutt wrote:

It depends on the sales tax laws of your state.  Every state has their own laws.

In my state food is not taxed unless it is 'prepared and served', which applies to eating at a restaurant and even getting food at a fast food place.  Otherwise, such as ordering food online or buying food at the grocery store, it is not taxable in my state.

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It's the same where I live, too.

I can usually keep track of the sales tax rules, but sometimes I forget and it can get to be a bit confusing over what is and isn't taxable. 

[Mominohio]

I think it does depend on your state. Ohio has no tax on foods, unless consumed on the property of places like a restaurant.

I can't imagine the burden a tax on food brings to middle and lower income people. 

[gardenman]

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@Mominohio wrote:

I think it does depend on your state. Ohio has no tax on foods, unless consumed on the property of places like a restaurant.

I can't imagine the burden a tax on food brings to middle and lower income people. 

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I have this pet theory that sales tax could be used to benefit consumers and states in multiple ways. The proposal is relatively simple. Refund the sales tax consumers pay to the manufacturer/provider (farmer for produce, food manufacturer, etc.) on all items made domestically. The national average sales tax is a tick over 5+% (5.457% to be precise) so that would refund 5+% of the consumer price to the manufacturer/provider.

Now that may not sound like a lot of money, but you have to remember that the price we pay for items is typically more than twice what it costs to produce the product. When a product leaves the manufacturer/provider it goes to a distributor/wholesaler. A typical markup at that level is 20% over the manufacturing cost. The item then goes to the retail level where the markup is typically around 100%. On items with a shelf life like produce, the markup is typically much higher because the merchants know much of what they acquire will end up in the dumpster. Because of the markups that 5+% in sales tax refunded to the manufacturer/provider represents a significant portion of their costs to create the product.

How does this benefit consumers? Let's look at a product that costs $1.00 to manufacture and goes through a typical markup cycle. That $1.00 becomes a $1.20 product when the 20% distributor markup is applied then about a $2.40 product at retail. Sales tax on that $2.40 product is around $.13. Assuming the manufacturer applies that $.13 to their manufacturing costs, the manufacturing cost of the product now drops to $.87 from $1. If you follow the same markup percentages that $.87 product now retails for $2.09 instead of the $2.40. That's a $.31 savings for the consumer. Of course at $2.09 the sales tax drops to more like $.11 instead of $.13 which raises the manufacturing costs to $.89 and the final consumer cost to $2.14 where things then stabilize. At $2.14 the consumer still saves $.26 which isn't bad. It's much more than the $.11 they paid in sales tax on the product.

How does this help the states? This type of program should bring back jobs and help secure those that are already here. Good jobs bring additional revenue to the states and reduce their costs in support payments. Lower prices, more jobs, fewer people on state welfare/assistance, all seem like a win to me. 

[depglass]

I don't think any food is taxed in Michigan, including candy.  ???

[Gdog2015]

I'm pretty sure we get taxed on our taxes in California! lol

As for the poster mentioning getting taxed on Amazon, that was an internet issue most state enacted years ago. The states, like California, were loosing tax revenue hand over fist because we all shopped online to avoid our 8-10% sales tax.