Don't Mess With Taxes

The money saving advice to grocery shoppers is don't go to the market when you're hungry. Today, I found a blogging corollary.

Eat before you write about taxes.

I didn't get around to having lunch before participating in an early afternoon sales tax webinar. So as I was finally scarfing down my midday meal at my desk, I got to thinking about taxes on food.

At the 2015 Sydney International Food Festival, the Australian advertising agency Whybin\TBWA created food-based representations of the flags of 18 countries. I love Italy's green, white and red vertical stripes displayed as basil, spaghetti and tomatoes. Photo courtesy Dose and Ads of the World.

Tax value of food: It's no surprise that prepared food, either bought as take-out or eaten at a restaurant, is taxable.

But some states also tax the food we buy at our local H.E.B., Publix, Kroger, Whole Foods, Trader Joe's, Walmart, Safeway, United, or neighborhood food mart.

That doesn't seem right to me. Everybody has to eat. It's a prime biological directive.

But then, that makes food a great tax target since we all, at least to some degree, buy food for the meals we have at home.

The good gustatory tax news is that most of the 45 states and Washington, D.C., that tack sales taxes onto most everything we buy do not tax food. 

But if you live in one of the others and you have a hearty appetite, you also better have an appetite for taxes.

State sales tax on food: The states where the general sales tax is collected on food purchases, according to Federation of Tax Administrators' data, are Alabama, Hawaii, Idaho, Kansas, Mississippi, Oklahoma, and South Dakota.

Most of these states -- Hawaii, Idaho, Kansas, Oklahoma and South Dakota -- at least offer lower income households a rebate or income tax credit to make up for the food tax.

And a handful of states collect a lower rate state sales tax on comestibles. They are:

• Arkansas, with a 1.5 percent food sales tax rate instead of applying the state's 6.5 percent general sales tax rate (plus local sales taxes),
• Illinois, with a 1 percent food sales tax rate instead of applying the state's 6.25 percent general sales tax rate,
• Missouri, with a 1.225 percent food sales tax rate instead of applying the state's 4.225 percent general sales tax rate,
• Tennessee, with a 5 percent food sales tax rate instead of applying the state's 7 percent general sales tax rate,
• Utah, with a 1.75 percent food sales tax rate instead of applying the state's 5.95 percent general sales tax rate (plus local sales taxes), and
• Virginia, with a 2.5 percent food sales tax rate instead of applying the state's 5.3 percent general sales tax rate.

Food sales not subject the state's sales tax, but local sales taxes do apply in Georgia, Louisiana and North Carolina.

If you live in one of these states, remember to chow down before hitting the grocery store aisles because you have to pay more for your food anyway due to taxes.

There is, however, one tax amuse-bouche for some food shoppers.

A few of states that do tax food also allow a rebate or income tax credit to compensate poor households. They are Hawaii, Idaho, Kansas, Oklahoma and South Dakota.

You also might find these items of interest:

• Tax crooks cook up a food tax scam
• Doughnut tax outrage on Sleepy Hollow
• Doing your taxes or eating healthy? Which is easier?