Taxes on donuts

[whoisjohngalt]

My oldest kid is getting very interested in money and has collected a small amount.

Last week he asked to go to the store with me.  He bought 3 yogurts and then wanted a donut.  He added up what everything cost and had his cash ready.

We get to the register and the total is .9 cents more bc of the tax on the donut. 

I had a very hard time explaining why there is a tax on certain foods.

BTW, we live in a state with no sales tax and no income tax.  He already knows about paying taxes so we can have civil services, roads, etc.  But donuts?

If this was your 6 yr old - what would you have said?

[Deleted]

If there is no sales tax, how was there tax in buying a donut?

[chiver78]

if you came south to my state, there is sales tax on prepared foods - which depending where you bought that donut, would apply. I'll assume that's what you did, and will use MA tax rules in my answer.

I would explain it that if something comes packaged (like the yogurt) then there isn't tax on it. if it's something that was prepared for you, like a restaurant meal for example, that's got tax on it.

[dannylion]

There are people who believe that donuts are not the essential element to keeping body and soul together that we know them to be.  For some reason, people like that tend to gravitate towards positions of authority where they have the power to impose their misguided notions on the rest of the population through means such as imposing taxes on perfectly innocent donuts.  We should pity them because they are sad, donut-deprived persons with tiny, shriveled souls.

[Deleted]

So, I'm guessing the donut is considered meal service? Is it a bakery in the grocery store? I guess I'd approach it that way. Groceries are considered necessary. 'Earing out' is not. So you pay tax on the fact that you don't have to make your own home made donut... Sonething like that?

[whoisjohngalt]

yes, it was a grocery store

But what does that tax gets used on?

[Opti]

Something as simple as lawmakers have decided to tax certain foods because they feel they are non-essential. These include donuts, ...

[Opti]

May 7, 2015 7:51:37 GMT -5 whoisjohngalt said:

yes, it was a grocery store

But what does that tax gets used on?

Find the law maybe it will tell you. Or try emailing a legislator in your state and asking.

[Deleted]

I. Beginning on July 1, 1995, and for each fiscal year thereafter, the department shall pay over all revenue, except revenues identified in paragraph III of this section, collected under this chapter to the state treasurer. On or before September 15 of each year, the department shall determine the cost of administration of this chapter for the fiscal year ending on the preceding June 30, and it shall notify the state treasurer of these costs by a report certified by them as to correctness. After deducting the cost of administration of the chapter from the total income, the state treasurer shall distribute the net income as follows:
(a) The amount necessary to provide payments of principal and interest on the bonds and notes authorized under RSA 198:15-a, II for the fiscal years ending June 30, 2009 through June 30, 2030;
(b) An amount equal to 3.15 percent of the net income distributed under the introductory paragraph of paragraph I and subparagraph I(a) in the first year of the preceding fiscal biennium, which shall be credited to the department of resources and development, division of travel and tourism development;
(c) Forty percent of the net income under the introductory paragraph of paragraph I of the most recent fiscal year to the unincorporated towns, unorganized places, towns, and cities. The amount to be distributed to each such town, place, or city shall be determined by multiplying the amount to be distributed by a fraction, the numerator of which shall be the population of the unincorporated town, unorganized place, town or city and the denominator of which shall be the population of the state. The population figures shall be based on the latest resident population figures furnished by the office of energy and planning; and
(d) The remainder to the general fund.
II. Each fiscal year, the amount to be distributed shall be equal to the prior year's distribution plus an amount equal to 75 percent of any increase in the income received from the meals and rooms tax for the fiscal year ending on the preceding June 30, not to exceed $5,000,000, until such time as the total amount distributed annually is equal to the amount indicated in subparagraph I(c).
III. Beginning on July 1, 1999, and for each fiscal year thereafter, the department shall pay over all revenue collected pursuant to RSA 78-A:6, II-a to the state treasurer for deposit in the education trust fund established by RSA 198:39.

[Deleted]

I just quoted dispensation. If you look up the whole meal and room tax law on bakeries specific it goes into detail. Buying quantities under 6 from a place that also sells individual coffee, etc. makes it meal rather than groceries...

[Deleted]

If he thinks that is bad, wait until he finds out how much they tax beer!

[thyme4change]

May 7, 2015 7:51:37 GMT -5 whoisjohngalt said:

yes, it was a grocery store

But what does that tax gets used on?

Was it baked in the store or at a common facility owned by the grocery chain in town that delivers it to the store?

If it is baked at the store, it is just like going to a restaurant and having them make something for you.  Same with those prepared chickens.  I don't think anyone thinks chickens are immoral and that is why they are taxed.  They are taxed because the store makes them for you, therefore is acting like a restaurant.  If they didn't do this, then all restaurants would just put a few shelves at the front and declare themselves a grocery store, and not collect any taxes.


Although I still don't understand why there is a sales tax if your state has no sales taxes?  Is there a luxury tax on restaurants and stuff like that?  But no sales tax on clothing and what-not.  

I also don't know how your state gets funded with no sales tax and no income tax.  Do you have an all-volunteer government?

[Deleted]

I had to look it up. NH has a meal and room tax that covers this. Prepared food for immediate consumption is considered meal service, including bakery items purchased in quantities under 6... As I read the law and faq.

[thyme4change]

May 7, 2015 7:54:21 GMT -5 Opti said:

Something as simple as lawmakers have decided to tax certain foods because they feel they are non-essential. These include donuts, ...

If that were true a package of Oreo's would be taxed and they are not (in my state.)  They are considered grocery.  

[yogiii]

May 7, 2015 8:11:08 GMT -5 thyme4change said:

May 7, 2015 7:51:37 GMT -5 whoisjohngalt said:

yes, it was a grocery store

But what does that tax gets used on?

Was it baked in the store or at a common facility owned by the grocery chain in town that delivers it to the store?

If it is baked at the store, it is just like going to a restaurant and having them make something for you.  Same with those prepared chickens.  I don't think anyone thinks chickens are immoral and that is why they are taxed.  They are taxed because the store makes them for you, therefore is acting like a restaurant.  If they didn't do this, then all restaurants would just put a few shelves at the front and declare themselves a grocery store, and not collect any taxes.


Although I still don't understand why there is a sales tax if your state has no sales taxes?  Is there a luxury tax on restaurants and stuff like that?  But no sales tax on clothing and what-not.  

I also don't know how your state gets funded with no sales tax and no income tax.  Do you have an all-volunteer government?

Property tax o'plenty

[whoisjohngalt]

May 7, 2015 8:13:52 GMT -5 oped said:

I had to look it up. NH has a meal and room tax that covers this. Prepared food for immediate consumption is considered meal service, including bakery items purchased in quantities under 6... As I read the law and faq.

Wait, are you saying I should have gotten 7 donuts??

Well, that would just solve so many of my problems!

[NancysSummerSip]

May 7, 2015 7:42:17 GMT -5 dannylion said:

There are people who believe that donuts are not the essential element to keeping body and soul together that we know them to be.  For some reason, people like that tend to gravitate towards positions of authority where they have the power to impose their misguided notions on the rest of the population through means such as imposing taxes on perfectly innocent donuts.  We should pity them because they are sad, donut-deprived persons with tiny, shriveled souls.

Every Friday is Donut Friday in my house - for my husband. He gets his weekly donut from the mom-and-pop shop in town. I pick it up for him, since I am out anyway. No donut for me (I cannot eat fried dough in any form).
If my husband read your quote, he would consider you to be lord and mistress of all earth.

[Opti]

May 7, 2015 8:14:11 GMT -5 thyme4change said:

May 7, 2015 7:54:21 GMT -5 Opti said:

Something as simple as lawmakers have decided to tax certain foods because they feel they are non-essential. These include donuts, ...

If that were true a package of Oreo's would be taxed and they are not (in my state.)  They are considered grocery.  

Please note I did not say lawmakers tax all foods they feel are non-essential. Lawmakers in NJ singled out juice to tax, but settled on 49% or less juice content only. Oreos remain tax exempt.

[Peace77]

Looks like buying 6 doughnuts would be enough to avoid paying tax.

Something has to pay the state employees such as the governor.

[Deleted]

Move to Alabama where all groceries are taxed.  Sales tax is currently 10% (includes county and city portion).  And, yes, we have an income tax.

Apparently all food in Alabama is considered non-essential. 

[yogiii]

I don't think she's complaining about the tax, I think she's wondering how to explain it.  Prepared food is the answer, it's the same as buying at Dunkin' Donuts.

[whoisjohngalt]

But where is that donut tax money is going?  state govt?

[Deleted]

May 7, 2015 9:16:18 GMT -5 whoisjohngalt said:

But where is that donut tax money is going?  state govt?

I already posted the part of the law that deals with how it is distributed...

[Deleted]

May 7, 2015 7:56:25 GMT -5 oped said:

I. Beginning on July 1, 1995, and for each fiscal year thereafter, the department shall pay over all revenue, except revenues identified in paragraph III of this section, collected under this chapter to the state treasurer. On or before September 15 of each year, the department shall determine the cost of administration of this chapter for the fiscal year ending on the preceding June 30, and it shall notify the state treasurer of these costs by a report certified by them as to correctness. After deducting the cost of administration of the chapter from the total income, the state treasurer shall distribute the net income as follows:
(a) The amount necessary to provide payments of principal and interest on the bonds and notes authorized under RSA 198:15-a, II for the fiscal years ending June 30, 2009 through June 30, 2030;
(b) An amount equal to 3.15 percent of the net income distributed under the introductory paragraph of paragraph I and subparagraph I(a) in the first year of the preceding fiscal biennium, which shall be credited to the department of resources and development, division of travel and tourism development;
(c) Forty percent of the net income under the introductory paragraph of paragraph I of the most recent fiscal year to the unincorporated towns, unorganized places, towns, and cities. The amount to be distributed to each such town, place, or city shall be determined by multiplying the amount to be distributed by a fraction, the numerator of which shall be the population of the unincorporated town, unorganized place, town or city and the denominator of which shall be the population of the state. The population figures shall be based on the latest resident population figures furnished by the office of energy and planning; and
(d) The remainder to the general fund.
II. Each fiscal year, the amount to be distributed shall be equal to the prior year's distribution plus an amount equal to 75 percent of any increase in the income received from the meals and rooms tax for the fiscal year ending on the preceding June 30, not to exceed $5,000,000, until such time as the total amount distributed annually is equal to the amount indicated in subparagraph I(c).
III. Beginning on July 1, 1999, and for each fiscal year thereafter, the department shall pay over all revenue collected pursuant to RSA 78-A:6, II-a to the state treasurer for deposit in the education trust fund established by RSA 198:39.

Here.

[wyouser]

May 7, 2015 9:16:18 GMT -5 whoisjohngalt said:

But where is that donut tax money is going?  state govt?

At this point we can expand the discussion into the physics realm........all taxes are sucked into a giant "Black Hole" where they apparently vanish forever

[tskeeter]

May 7, 2015 7:54:21 GMT -5 Opti said:

Something as simple as lawmakers have decided to tax certain foods because they feel they are non-essential. These include donuts, ...

And those lawmaker would be wrong!  About the non-essential donuts part.

What can be more essential than a hoop of batter.  Fried in hot hog fat.  Making grease stains on the bag you are carrying your tasty treasures in.  Crispy on the outside.  Warm, sweet and tender on the inside.  The only thing that could possibly be more essential that a warm fresh cake donut would be a second warm, fresh cake donut that was dredged in cinnamon and sugar. 

[whoisjohngalt]

May 7, 2015 9:18:51 GMT -5 oped said:

May 7, 2015 9:16:18 GMT -5 whoisjohngalt said:

But where is that donut tax money is going?  state govt?

I already posted the part of the law that deals with how it is distributed...

It's so sweet that you give me credit for reading all that stuff first thing in the morning.

The morning that did NOT include any donuts!

[Deleted]

Well, if you had gotten a half dozen ...

[zibazinski]

So, it's not a so-called sin tax. Well, you'd think they'd tax you more if you bought a lot of donuts to try to keep you from eating a lot of them.

[tskeeter]

May 7, 2015 11:31:24 GMT -5 zibazinski said:

So, it's not a so-called sin tax. Well, you'd think they'd tax you more if you bought a lot of donuts to try to keep you from eating a lot of them.

The oxymoron of legislative logic.