Weekly Round-Up: Food for Thought

Food, specifically the sales tax treatment of food, seems to be on the minds of many state officials these days.

Colorado Gov. John Hickenlooper signed a bill, S.B. 94, enacted March 9, which aims to ensure that the sales tax treatment of food does not change simply because a store sells it as convenience food.

Under current Colorado law, food for home consumption is exempt from state sales tax, but prepared food from restaurants, delicatessens, and convenience stores is taxable by the state if the food is intended to be consumed right away. Taxable food items include prepared sandwiches, salads, and hot foods including those heated at the store. The bill is intended to ensure that identical food items are taxed consistently regardless of where the item was purchased.

In Massachusetts, salads packaged with ‘fixings' in a manner designed to provide ease of immediate consumption by an individual are subject to the state sales tax when sold by a grocery store, according to a recent letter ruling issued by Massachusetts.

In determining whether the salad is subject to sales tax, it does not matter which section of the supermarket the salad is from, or whether the salad is sold on an eat-in or to-go basis, the letter ruling provides.

Meanwhile, Missouri’s Supreme Court found, in Aquila Foreign Qualifications Corp. v. Missouri Dir. of Rev., No. SC91784 (Mo. March 6, 2012), that a convenience store is not entitled to a sales and use tax exemption for the purchase of electricity used in its food preparation because the legislature did not intend the term “processing” to include food preparation.

For complete coverage of these developments, check out this week’s issue of the Bloomberg BNA Weekly State Tax Report.

In other developments…

For a look at the corporate and individual income tax return deadlines that have been extended as a result of Emancipation Day in D.C., check out Assistant Managing Editor, State Tax, Steven D. Roll’s article in this week’s issue of the Bloomberg BNA Weekly State Tax Report, which can be read in its entirety here.

Kate Thurber, of PricewaterhouseCoopers LLP, reviews the Louisiana High Court’s decision to decline to review Utelcom Inc. v. Bridges, a ruling that a foreign limited partner lacked nexus.

Indiana’s Legislature approves a plan to eliminate the inheritance tax, Mark Robyn and Jordan King, of the Tax Foundation reports.

KPMG issues its Film Financing and Television Programming: A Taxation Guide, which includes coverage of state incentives.

Compiled by Priya D. Nair
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