Why do some restaurants tax to-go items, while other establishments don't?

Question

Coffee Bean taxes items that are consumed at their location, but doesn't tax items to go. Why do other establishments such as McDonalds, Jack -in-the-Box, etcetera not follow that process...i.e., are we customers paying taxes on to-go items that aren't being taxed to the corporations? If so, it is a huge rip-off to the states that aren't collecting revenue from the very corporations that are taxing us. If we are indeed paying taxes on items that aren't taxed, what can we do about it?

Answer 1

I don't think a company that big like McDonald's would do such thing considering how big of a business risk it is. Think about it all kinds of people eat from McDonald's. Even the people who do our taxes. So somebody ought to notice it.

Answer 2

It depends on the laws of your state. In Wisconsin, raw food is not taxed, while prepared food is. This makes for oddities at the grocery store when milk, eggs, vegetables, meats, and so on are not taxed, but if you go to the deli department and buy a roasted chicken, that is taxable.

In restaurants, it's simple: all food is prepared and therefore taxed. The majority of restaurants will have sales tax added at the end of your bill, so it's easy to see. In Wisconsin, there is no difference whether food is consumed on the premises or taken out... it's prepared, so we have to pay tax on it.

Some little Mom and Pop stores might add the tax into the price of their food, so if you go in to buy a muffin and it's $1.75, you pay $1.75. The thing is, the store is still liable for the sales tax, so they'll have to send in a check for what the sales amount would have been less the tax.

Here, if I go to a coffee shop and buy a cup of coffee, I have to pay sales tax, whether it's for there or to go. If I buy coffee BEANS, that's unprepared (or raw) food and is not taxable. So, the store (like the grocery store in my above example), sells both prepared (taxable) food and unprepared (nontaxable) food.

My guess is, if your state's laws are like ours, prepared coffee taken out should be taxed. If they're not charging it to you, they're most likely giving you a break, ringing it up as an unprepared and nontaxable food item.

If on occasion you're supposed to be taxed and aren't, don't sweat it.