Even though fall may still be a few weeks away, it seems all things pumpkin are now available. Business Insider reported that Starbucks started selling their famed Pumpkin Spice Lattes on Aug. 28 this year. Additionally, most pumpkin patches and corn mazes usually open by mid-September, according to pumpkinpatchesandmore.org. With all these pumpkin products and activities, sales tax questions inevitably arise.
If you like to celebrate the start of fall with one of Starbucks’ Pumpkin Spice Lattes, your coffee will be taxable in most states as prepared food. However, there are caveats. If you’re in Ohio and take your coffee to-go, your pick-me-up will be tax free as Ohio doesn’t tax the sale of prepared food sold for off-premises consumption. In Georgia, coffee sold to-go for off-premises human consumption will be subject to local taxes, but not the state sales tax. New York taxes all coffee that is sold in a cup, regardless of whether the seller provides a lid.
Many individuals like to enjoy the nice fall weather by going out to pumpkin patches or corn mazes. The admission charges for these attractions are often taxable. Texas notes that entrance fees for tours of a pumpkin patch are taxable amusement services. In Wisconsin, fees to enter a corn maze and fees for the use of a pumpkin cannon (which sounds delightful) are both taxable.
What if you’re not interested in touring a pumpkin patch or pumpkin flavored coffee, and just want to buy a plain pumpkin? Sales of pumpkins are also subject to different taxability rules by state. In Wisconsin, undecorated, unprocessed pumpkins for human consumption are tax-exempt. Washington presumes that sales of pumpkin are nontaxable food items, unless the pumpkins are sold painted or are otherwise clearly for decorative purposes. Tennessee allows farmers to sell pumpkins tax-free, as long as the farmer has produced 50 percent or more of the total pumpkins he or she sells; however, pumpkins purchased at a Tennessee grocery store will be taxed at a reduced rate of 4 percent. In Alabama, charges for children to go on a wagon ride at a pumpkin patch and pick out a pumpkin for purchase are taxable.
Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn: Does your state impose sales tax pumpkin products?
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