It’s Fix the Tax Code Friday!
Earlier today, I posted a piece on the new ruling in the UK that Pringles, made mostly of things “other than potato” or not, would be considered a snack food that does not meet an exemption for purposes of sales tax/VAT.
In many countries, states and municipalities, foods are exempt from sales tax and other value-added taxes. But as our world changes, as scientific advances occur, as manufacturers and marketers become more creative, our idea of “food” is changing. So what should qualify for an exemption? All foods? Natural foods? Processed foods? What about genetically altered foods? Artificial foods?
So, today’s Fix the Tax Code Friday is a question that the high courts in the UK are struggling with:
Must there be a natural component? A threshold percentage of natural components? Or must it merely be edible?
{ 3 comments… read them below or add one }
Here in Arkansas our beloved state government decided to cut the sales tax on food and medicines in half (That’s right — unlike most states, we still pay sales tax on groceries: just not as much as we used to!).
So we, like every other place that exempts food from some or all sales tax, have to have a definition of “food”. I don’t know the elaborate ins and outs, except that in grocery stores “prepared food” doesn’t get the exemption. Apparently prepared food is ready to eat, due to some form of preparation by somebody. So oranges and apples are exempt, but fruit salad isn’t. Raw chicken is exempt, fried chicken isn’t. Raw bacon is exempt, but I don’t honestly know about that heat-and-eat cooked bacon stuff. Bread is exempt even though it obviously is “prepared” from other, more basic, ingredients.
Everything in a restaurant is fully taxed.
In spite of all this gibberish, I honestly don’t have an answer for the actual question: what is food? Except that I would never include eggplant.
I would add anchovies to the “taxed” list — those are pet food!
Urb
My dad would argue with you on that one. He loves anchovies!