Want Your Bagel Sliced? It'll Cost Ya

Photo via muppitz's flickr

How much for that bagel in the window? Well, that depends on how you're taking it. Apparently State tax officials have started enforcing an odd sales tax law; according to the Wall Street Journal, while the sale of a whole bagels aren't subject to sales tax, sliced bagels are!

The State Department of Taxation and Finance further declares that a "sliced or prepared bagel (with cream cheese or other toppings)" is subject to sales tax, and any bagel (even unsliced) eaten in a store is subject to that same tax. But what if you buy one from a street cart, sliced but without toppings? And what about bialys or the coveted Canadian bagel?! (Oddly, the law doesn't apply to sliced bread.)

Bruegger's Bagel franchise, which has 33 New York storefronts, found out about the tax when they were audited, and the owner was told he was out of compliance with the policy. He was forced to pay a "significant" sum in taxes, a number the state estimated he owed. The shop now has signs explaining the 8-cent price hike, which points out the law to customers who thought they were being charged extra for the time it took to slice the bagel!

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Jen Carlson in Food on August 24, 2010 4:25 PM

Comments [rss]

jaycjay

The WSJ article makes what's actually fairly straightforward seem pretty confusing, starting with this:

In New York, the sale of whole bagels isn't subject to sales tax. But the tax does apply to "sliced or prepared bagels (with cream cheese or other toppings)," according to the state Department of Taxation and Finance. And if the bagel is eaten in the store, even if it's never been touched by a knife, it's also taxed.

Contradicting themselves, because the last sentence means that the sale of whole bagels can be subject to sales tax in spite of the declaration at the beginning.

If anyone wants to bother, the real rules are here:

https://docs.google.com/viewer?url=http://www.tax.state.ny.us/pdf/publications/sales/pub880_798.pdf&pli=1

dogbert

Thanks for posting that. It doesn't stop with bagels:

Peanuts and popcorn eaten off premises = no sales tax, unless candy-coated, sugared, or heated. Maybe the state will go after those pushcart nut vendors next.

John L

Absolutely ridiculous.

Sliced, not sliced, topping, no topping, bialy, canadian bagels, bread no tax, who can figure these tax codes out?

I can kind of understand the need to make distinctions for tax purposes but to go after a small business, I hope they at least gave him some kind of break on the taxes owed.

Daniela

I hear slicing it adds like a million calories, so it only makes sense from a public health standpoint... no wait...

moocowtoo

There should be a Triple tax on people who want their bagels scooped

hashedz

I get mine half-scooped on each side, then ask for cream cheese in the top scoop and jelly in the bottom scoop. In the top half unscooped side I have them spread some peanut butter, and the bottom half unscooped side I get buttered.

Ok, this is all untrue, but I'd probably have them prepare it for me this way if you were standing behind me on line, dope.

Potty Boy

I ask for mine half scooped only.

GOP

Makes sense. Prepared foods vs food you buy at a supermarket. One gets taxed and one does not.

grizzzly

always a funny line to draw; carton of orange juice, no tax; put a straw in it, bam, prepared beverage.

GOP

right. but these lines must be drawn for tax purposes, no?

exnyer

Time to get the Fed to start minting more pennies, and I used to just throw them away....too heavy in the pocket.

Nyctini11

WOW, really? just wow

dogbert

New York has to have one of the most ass-backwards, illogical sales tax regimes in the nation.

Stevennnn

Reason why people are idiots for moving here or staying here (For most people like myself there is no other choice sometimes and just have to suck it up).

NY is not the place to own your own business.