The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Setters-r-Better on October 11, 2014, 09:03:10 AM
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Does your location have this? I'm having an angry moment realizing that a portion of our grocery budget goes to sales tax.
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Where I live there's no sales tax on food. Prepared food, especially where utensils are provided, is taxed. So depending on what you shop for here, much of your food budget would not be taxed.
Strangely: "A business must collect retail sales tax on all food item sales if its sales of “prepared foods” make up more than 75 percent of its annual sales of food and food ingredients."
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A couple of links for locations in the US:
http://www.cbpp.org/cms/?fa=view&id=1230
http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States
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In Sweden, the VAT ( roughly the same idea as sales tax ) on groceries is 12%. This is actually a lower tax level, as most other things have a VAT level of 25%.
Welcome to Europe. :)
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In our state, and our county, there's 2% tax on food, but 7.75% on prepared food, so cook at home!
There's some weird thing about candy being charged at 6.75%, but if it has flour in it, it's no longer considered candy, but food (http://www.taxrates.com/blog/2014/01/23/north-carolina-candy-and-sales-tax-story-problem-or-real-life/). Taxes are weird.
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Full sales tax rate on groceries in Alabama and Mississippi. These states have low costs of living, but overburden low income people with
regressive taxation.
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Full sales tax rate on groceries in Alabama and Mississippi. These states have low costs of living, but overburden low income people with
regressive taxation.
It is the only tax that low income people pay at all except land tax if they are homeowners. How is this overburdening? Shouldn't everybody pay something?
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I noticed last week that my cocoa covered blue diamond almonds are taxed but my roasted ones are not. Pissed me off. I guess it's like the candy tax mentioned earlier.
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It varies a lot from state to state. Funny thing is that my wife, who grew up in PA cannot stand paying sales tax on clothes. She'll almost pay more buying something from a no/low sales tax state but then have to pay shipping.
To make you feel better (or worse) look at sites like this (from searching "total tax burden by state")
http://taxfoundation.org/article/annual-state-local-tax-burden-ranking-fy-2011
and this one (the most complete that I have seen)
Each state has to generate it "revenues" one way or another. In my view, the variations in total tax burden (i.e. regardless of whether it came from income, sales, or property tax) highlights the efficiency of that states government. Illinois sucks. Sales and Prop(%, but not $$ since homes in Illinois are more expensive.....at least Chicago) are similar to Texas, but Texas has no income tax....IL has 5%.
The candy but not flour tax is an example of govt trying to encourage certain behavior. e.g. tax on cigarettes, gasoline. Some will determine which sorts of food are basic needs (and charge no tax) and which are unnecessary (candy).
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Full sales tax rate on groceries in Alabama and Mississippi. These states have low costs of living, but overburden low income people with
regressive taxation.
It is the only tax that low income people pay at all except land tax if they are homeowners. How is this overburdening? Shouldn't everybody pay something?
You are correct. Everyone should pay something, but low income people should not be taxed for basic foodstuffs. Here in CA, we do not pay sales tax on food, but we do on everything else. There is also a progressive state income tax (which IMHO is fairer), and a reasonable property tax.
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In Kentucky there is no sales tax on food at the grocery.
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Its supposedly low COL here, but between the gasoline tax that's higher than neighboring states, near 9% sales tax on everything including food, clothes, and cars, property tax that seems high enough, state income tax....geez I'm beginning to wonder.
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Here in TN we do have sales tax on all groceries. Sales tax is 9.75%, but I think on groceries it is 1% less or something like that. But no state income tax and an overall lower COL, so I think we still come out ahead.
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I moved from New Zealand where tax on food is 15% to Nevada where it's 0% (except prepared food which does have sales tax). It's awesome!
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I live in PA where there's no sales tax on food or clothing, as they're considered necessities. Prepared food (ie. fast food, a ready-made rotisserie chicken, anything in a restaurant) is taxed.
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I'm in NY, and food is not taxed, except for some interesting exceptions. Candy is taxed, and soft drinks, koolaid, and bottled water. Nuts are not taxed unless they are candy coated or honey roasted, and honey and sugar are not taxed. But honey roasted nuts ARE taxed. Chips and other junk food are not taxed. Strange exclusions.