CUDA: The next time you order coffee…
SOT// Starbucks sounds
CUDA: get a burger and a coke from the drive through window…
SOT// Drive through order sounds
CUDA: Or get twinkies from the vending machine…
SOT// change clinking, vending machine dispensing item
CUDA: …you might be surprised at the tax consequences. While food is generally exempt from sales taxes in Ohio, all THOSE purchases ARE taxable.
According to the Ohio department of taxation, soft drinks, dietary supplements, alcoholic beverages and tobacco are NOT FOOD and therefore, taxable, as is almost anything that you eat on the premises. So, food eaten in a restaurant is taxable but take-out is not. Sounds simple enough, right? As it turns out, in the case of beverages it quickly becomes complicated. I called John Kohlstrand in the Ohio department of taxation to help me figure out the rules.
Kohlstrand: One of the rules here is whether it's sweetened. If sugar is added to the product before its sold and it's a beverage then it's not food and its taxable.
CUDA: So what does this mean for my morning coffee John?
KOHLSTRAND: Coffee is not taxable… sigh ..let me think. You were reading this yesterday, don't we have a guide on our website?
CUDA: Eventually we figure it out and it works like this. If you stop at Starbucks and order a cup of
black coffee, it's food, and is tax free. But if the barista adds the sugar for you, it's not food, and you have to pay tax. To complicate matters further, milk and other dairy products are considered food - so if you order a latte, or a mocha with whipped cream it's food regardless of whether it has sugar or not, and voila --it's tax free.
KOHLSTRAND: The milk trumps the sugar...(laughs) this is easier for me. I always drink my coffee black.
CUDA: Now all of this assumes you are taking that coffee to go - because the instant you decide to consume it in one of their comfy chairs and read the paper you get hit with a tax.
That goes for your sandwich, salads and soups, and even the fast food you get through the drive through. Eat it in the restaurant and you're paying tax. Take it with you and save yourself some change.
But what if you change your mind between the time you place your to-go order and the time you pay for it? Are you a tax evader if you decide to grab a table and eat it where you bought it? Officially, Kohlstrand says, YES.
KOHLSTRAND: I don't know if we've ever pressed charges against anyone because of something like this. We think most people play by the rules. When they say they are getting it to go, they are really getting it to go.
CUDA: The thing about the tax code is that over time, things change. The sales tax has been around since 1935, so Kholstrand says it's only natural that it has evolved. And now, what once seemed simple - a state sales tax - has become more complex. Kohlstrand says there are a page and half of exceptions in the state department of taxation's annual report
KOHLSTRAND: Here's another challenge we have: vending machines. If you think about the snack machine in a big office or something. The tax is supposed to apply if you buy a candy bar out of snack machine and eat it right at the table that's provided for you in the break room.
CUDA: That's crazy though! I mean, vending machine food is by default "to go" (laughing) don't you think?
KOHLSTRAND: According to the law, if you buy a candy bar and eat it right next to the vending machine the tax is supposed to apply. But we work it out with the vending machine operator, it's not something we push onto the guy who purchases the candy bar.
CUDA: Good to know.
//SOT: Sound of vending machine dispensing chips bag opening and soda pop opening.
CUDA: But just to be on the safe side, I think I'll take these with me. Gretchen Cuda, 90.3