- States generally exempt or reduce sales tax on groceries (food for home consumption) but fully tax prepared foods (like restaurant meals and hot deli items).
- The distinction hinges on whether food is sold as ingredients for home use or as ready-to-eat/prepared items, with technical definitions varying by state.
- Groceries are considered essential and taxing them is seen as regressive, while prepared food is viewed as discretionary and more acceptable to tax.
- Some items like candy and soft drinks are often taxed even when other groceries are exempt, with complex definitions affecting their tax status.
Source: salestaxsolutions.us
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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