Is it a Hot Dog, a Sandwich, or a Flying Superhero? National Hot Dog Day, Taxes & Life as We Know It

Is it a Hot Dog, a Sandwich, or a Flying Superhero? National Hot Dog Day, Taxes & Life as We Know It- hot dog graphic

As we reflect on the ubiquitousness of hot dogs in American life – they are all over our sports stadiums, ensconced in our movie theaters, and popping up at food carts dotting our urban streets –  our minds (of course) turn toward taxes.

It may surprise you that in New York, where I hail from, hot dogs were the subject of a heated tax debate.

Hot Dog as a Sandwich

Sandwiches in New York are a sales-taxable item.

Therefore, if a hot dog could be classified as a sandwich (that is, assembled and meant to be eaten on premise, or wherever you walk with it), it is also subject to a sales tax.

Well, guess what? It has been deemed so in the state of New York. For sales tax purpose, a hot dog is a sandwich… and you’ll pay tax on that!

Witness this statement, from the NY Department of Taxation and Finance:

“Sandwiches include cold and hot sandwiches of every kind that are prepared and ready to be eaten, whether made on bread, on bagels, on rolls, in pitas, in wraps, or otherwise, and regardless of the filling or number of layers. A sandwich can be as simple as a buttered bagel or roll, or as elaborate as a six-foot, toasted submarine sandwich.”

You’ll even find “hot dogs and sausages on buns, rolls, etc.” listed as an example of a sandwich on the NY tax office’s website.

 

Let’s say you bought hot dog buns and uncooked hot dogs, that’s not a sandwich and not subject to sales tax.

However, when you walk up to one of those hot dog vendors on the streets of Manhattan and you order up a chili dog (or any kind of dog, really), it’s going to be taxed. It’s assembled and meant for immediate consumption – on the street corner or wherever you walk it.

Clear as mud?

We thought so…

Enjoy Your Hot Dogs Tax-Free

If you insist on avoiding unnecessary tax, run down to the grocery store for the dogs and buns and fire up the grill! That way, you can enjoy your hot dogs tax-free.

That is, if you live in one of the 38 states and the District of Columbia that allows you to buy groceries tax-free.

The states that completely exempt groceries from sales tax are:

  1. Arizona
  2. California
  3. Colorado
  4. Connecticut
  5. Florida
  6. Georgia
  7. Indiana
  8. Iowa
  9. Kentucky
  10. Louisiana
  11. Maine
  12. Maryland
  13. Massachusetts
  14. Michigan
  15. Minnesota
  16. Nebraska
  17. Nevada
  18. New Jersey
  19. New Mexico
  20. New York
  21. North Carolina
  22. North Dakota
  23. Ohio
  24. Pennsylvania
  25. Rhode Island
  26. South Carolina
  27. Texas
  28. Vermont
  29. Washington
  30. West Virginia
  31. Wisconsin
  32. Wyoming
  33. District of Columbia

These states tax groceries at a lower rate than the general sales tax (at least that’s something):

  1. Arkansas (1.5% versus 6.5%)
  2. Illinois (1% versus 6.25%)
  3. Missouri (1.225% versus 4.225%)
  4. Tennessee (5% versus 7%)
  5. Utah (3% versus 5.95%)
  6. Virginia (2.5% versus 5.3%)

Of course, if you’re lucky enough to live in one of the five states that have no sales tax, you don’t have to worry about it. You can eat your hot dog at your favorite restaurant, street corner vendor, or buy it uncooked – there is no tax difference in these states:

  1. Alaska
  2. Delaware
  3. Montana
  4. New Hampshire
  5. Oregon

It’s good to mention that you could pay local sales taxes on groceries in Georgia, Louisiana and North Carolina.

Skip the Soda (and the Candy)

Oh, and if you want to enjoy a soda with that dog? Watch out!

About 62% of states give you a food purchase exemption for groceries, but tax your soda (as well as candy… so put that down, too).

And whatever you do, don’t pick up a cooked rotisserie chicken… that would be taxed.

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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting Services as well as the Enrolled Agent and Certified Tax Resolution Specialist for SFS Tax Problem Solutions.
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Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.

The book is available in paperback and ebook on https://Amazon.com
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For more on SFS Tax Problem Solutions, visit: http://sfstaxproblemsolutions.com/
For more on SFS Tax & Accounting Services, visit https://sfstaxacct.com/
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