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  1. #1
    Junior Member
    Join Date
    Oct 2020
    Posts
    17

    Coffee and taxes

    Hey all,

    So i know coffee sales are tax free, but can someone point me to the documentation that states it possibly? I'm in CO, and the state has not been helpful nor irs (who would have thought? ).
    Thanks!

  2. #2
    Senior Member
    Join Date
    Nov 2019
    Location
    New Jersey
    Posts
    413
    From what I can see, the sale of coffee in Colorado is subject to a 2.9% sales tax. I don't live there but where I live in NJ, a cup of coffee is taxed. However, when I buy my beans the roaster isn't charging me a sales tax. I'm assuming he's paying the sales tax from what i pay him.
    Absurdity is the only reality - FZ

  3. #3
    Super Moderator
    Join Date
    Feb 2008
    Location
    Near Philadelphia, PA
    Posts
    5,165
    Quote Originally Posted by deadXgreg View Post
    Hey all,

    So i know coffee sales are tax free, but can someone point me to the documentation that states it possibly? I'm in CO, and the state has not been helpful nor irs (who would have thought? ).
    Thanks!
    Your state's department of taxation should have a list (on their website) of all the items that are taxable in your state and what are not. It gets a little tricky with some items. In many states, coffee beans and ground coffee are considered food items, and they are not taxed. But if the coffee is prepared for you, it is taxed. If your state doesn't tax food items that you buy at the grocery store, and if you buy those same food items in a restaurant, you have to pay tax for it. (muffins, donuts, etc. for example) In some states, if you buy bottled water at the grocery store, you don't pay tax on it. But if you go to a convenience store and buy the same water and it's chilled in a cooler, it is taxed. The individual states make the rules. If the item is altered in any way such as taken out of the package and served or repackaged for sale, or heated or chilled, etc. it's taxable.

    It's best if you can do some exploring and get a list of what's taxed and what's not.

    Some stores and coffee shops include the tax in the price of the coffee to round out the numbers. It is easier to charge a straight-up $2.00 for a cup of coffee vs. $1.88 - it makes it easier for the customer and the person at the cash register. But, the shop owners have to do the bookkeeping on their end, and pay the state their tax money every three months.

    I hope you will be able to find what you're looking for. You will need to do some exploring on your state's tax website (the section for business owners)

    ~ Rose
    Last edited by PinkRose; 01-28-2021 at 09:37 AM.

  4. #4
    Junior Member
    Join Date
    Jan 2021
    Posts
    5
    Oh, sorry I don't know

 

 

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