Taxable Food Items

So when going through my Costco receipt yesterday, I noticed that I was charged tax for my Poppy Seed Salad and my Made In Mexico Coca Cola. Let me tell you what I’ve always thought about food taxes. I had always assumed that items that are served to you (i.e. in a restaurant) or made ready to consume (i.e. to go sandwiches) are taxable. All other food items generally are not taxable with the exception of special cases like alcohol and etc. I thought maybe that’s how they indicate the CRV for aluminum cans (glass bottles in this case), however it was indeed taxed according to my math.

Anyway, I was shocked to find out my Coca Cola was taxed. I was wondering if it had to do because it was foreign product or maybe it was a mistake. I searched online and found this page: Ready-to-Eat Food:

Flour, sugar, bread, milk, eggs, fruits, vegetables, and similar groceries are not taxable. Candy, soft drinks, and gum are taxable, however.

Food is also taxable when served in restaurants and similar places of business. Listed below are some guidelines to help you determine when food is taxable and when it’s not.
These items are taxable:

  • prepared food sold with eating utensils;
  • food kept hot (ready to eat), such as barbecued chicken (whether whole or pieces), chili, and soups;
  • ready-to-eat sandwiches (but not frozen sandwiches);
  • all ice cream sundries, unless sold prepackaged in boxes;
  • all soft drinks (including powdered drink mixes), diluted juices (50 percent or less vegetable or fruit juice), beer, and wine;
  • tea, coffee, and juices sold in restaurants, lunch counters, cafeterias, vending machines, and hotels, or sold ready for immediate consumption from pushcarts, cars and trucks, or any other vehicle;
  • individual-sized portions (including super-sized servings) or packages of food such as chips and peanuts when they are sold from a lunch counter or snack bar; and
  • ice.

Retailers who mix two or more food ingredients on the premises to sell by weight or volume (for example, salad) as a single item must collect sales tax unless the product is typically reheated prior to eating (e.g., macaroni and cheese).

This rule does not apply to bakery items and food that is only cut, repackaged, or pasteurized.

A business that provides eating facilities, such as tables and chairs or booths, must collect tax on food sold ready to eat.

Bakery products are not taxable unless sold with plates or eating utensils. Bakery products include refrigerated pies, cakes, tarts, and cookies but do not include entrees that are “baked.”

A juice drink (e.g., orange juice, grapefruit juice, tomato juice) that contains more than 50 percent fruit or vegetable juice by volume is not taxable unless sold ready for immediate consumption. “Ready for immediate consumption” means, for example, served in a cup or with a straw. A store that has eating facilities such as tables and chairs must collect tax on sales of individual-sized bottles or cartons even if they contain more than 50 percent fruit or vegetable juice.

Convenience stores and grocery stores that don’t have eating facilities should not collect tax on chips, cookies, crackers, peanuts, and similar snack foods even when sold in individual-sized containers. Items purchased with the Lone Star Card are exempt from sales tax.

Water is not taxable unless it is flavored.

I’m shocked. It appears soda has always been taxed. Even when it’s not sold ready to be consumed. In my case, I don’t consider room temperature soda to be ready to be consumed.

On the same site as above, they have a complete list of which items are taxable and which items aren’t taxable: Grocery and Convenience Stores: Taxable and Nontaxable Sales

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