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Wacky Sales Tax Facts

Here’s fun food related sales-tax fact. Did you know that if you bought a bagel in New York,  you’re exempt from Sales Tax? but with one caveat, it’s not sliced so you’d have to do this yourself. I found out when I was in New York a couple of years ago and decided to stop by a bagel place before heading in for a political technology convention.

The guy at the counter told me that he’d have to charge me more if I needed it “prepared” which seemed a little bizarre to me. Why would you serve an unprepared bagel if that’s your business? If I wanted an unprepared meal I would have gone to Safeway or QFC instead. It wasn’t until I joined Avalara that I found out the reason.

A bagel in New York is considered a grocery item for home consumption which is exempt to sales-tax but for someone to prepare it (in this case slicing it) would incur an additional 8.875% sales-tax because it was served at a commercial establishment. Prepared in this case could also mean sliced or cream cheese applied or sliced, topped with smoked salmon and capers.

8.875% bagel tax

If you want to test this out, you could give our APIs a whirl by signing for a free account at /getting-started and making a quick API call.

In order to set that calculation up and to ensure accuracy, you could either setup a custom Tax Code mapping in the Admin Console for a bagel or use the AvaTax system tax code which is PF120012.

Admin Console

Let us know what you find. More wacky sales-tax facts on food in the coming posts.

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