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Eating Warm Cookies in NYS Unhealthy (for your Bottom Line)

10.04.16 | SALT Chat

Let’s face it: the human body and its interaction with food is a complex thing that we are far from completely understanding. One day coffee is bad for you; the next day (today) it prevents dementia. Trying to keep up with what to eat is getting harder every day. My advice to you is to keep up with the latest independent studies (those whose primary researcher wasn’t Juan Valdez, the fictional character created in 1958 by the National Federation of Coffee Growers of Colombia) and apply a modicum of your own common sense. Keep your fingers crossed and hope for the best.

Should we be taking nutritional advice from the New York State Department of Taxation and Finance? I think not. 

Retailers, consumers and readers of my blog (see the May 16, 2016 SALT TALK, “You Are What You Eat”) are well aware of the insane nuances that may make an otherwise nontaxable consumable item suddenly taxable. While to the Department’s credit, it has attempted to rectify the situation at times (the size of marshmallows no longer is relevant), one of its latest Advisory Opinions[1] seems to take a step back in time. Selling cookies in a “heated state” makes otherwise exempt cookies subject to the sales tax.

To be honest, I forgot that “cold” cookies weren’t taxable under the exemption for baked goods.  But the question we should be asking is why cookies are exempt and candy isn’t?  Is one healthier than the other? Tax policy decisions are often driven by what lawmakers and administrators have decided is good for you. Is my State Senator trying to get me to lay off the candy bars and eat more cookies? What about cookies that just came out of the oven? Are those better for me than the ones sitting under the orange lamp for half the day?

Is any of this healthy for business? Juan Valdez doesn’t think so.

Questions regarding tax issues (not food choices)? Contact me at WBerkowitz@BerdonLLP.com or your Berdon advisor.

Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP -New York Accountants, advises clients on the unique requirements of governments and municipalities across the nation.

[1] TSB-A-16(14)S