Death by 8 million SlicesLittle known tax clause boosts prices for New York bagels
Have you noticed bagel shops tacking on a few more cents to your beloved pumpernickel and cream cheese? Blame Albany.
Bagels – however you slice them – most likely haven't been subject to tax at your favorite neighborhood shop. But, desperate for cash, Albany began enforcing a little known clause in its sales tax code that calls for a tax on sliced bagels or whole bagels consumed at the place of purchase, according to The Wall Street Journal.
When an audit found New York chain Bruegger's Bagel in violation of this often unenforced clause, the state demanded owner Kenneth Greene cough up a "significant" amount in taxes to cover what the state figured he owed, according to the Journal.
Customers bristled at the additional charge – roughly 8 cents a bagel -- blaming the franchise for trying to squeeze every penny out of patrons in a tough economy. The backlash prompted Greene to post signs near the cashiers explaining the cost increase.
"New York State is requiring that all sliced bagels and all food eaten on our premises be taxed. We apologize for this change and share in your frustration on this additional tax," the signs read, according to theJournal.
Bruegger's appears to be the only major franchise cracked down on thus far, and Florence Wilpon, one of the founding owners of Manhattan's Ess-a-Bagel, told the Journal she hoped it stayed that way.
In the meantime, a spokesman for the tax department told the paper the state "will provide additional guidance via our Web site and publications in the near future."
Earlier this month, the state passed one of its latest budgets ever to contend with a $9.2 billion deficit. The budget included hikes on cigarette taxes, eliminating the sales tax emeption on clothing and shoes costing under $110 and slicing charitable deductions for New Yorkers making $10 million a year in half, among other clauses.
By: Mark Hemingway
Commentary Staff Writer
08/22/10 5:10 PM EDT
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An new iPad owner syncs the device with his laptop computer while visiting a Starbucks Coffee location April 3, 2010 (Photo by Tom Pennington/Getty Images) |
It looks like cash hungry local governments are getting awfully rapacious these days:
Between her blog and infrequent contributions to ehow.com, over the last few years she says she’s made about $50. To [Marilyn] Bess, her website is a hobby. To the city of Philadelphia, it’s a potential moneymaker, and the city wants its cut.
In May, the city sent Bess a letter demanding that she pay $300, the price of a business privilege license.
“The real kick in the pants is that I don’t even have a full-time job, so for the city to tell me to pony up $300 for a business privilege license, pay wage tax, business privilege tax, net profits tax on a handful of money is outrageous,” Bess says.
It would be one thing if Bess’ website were, well, an actual business, or if the amount of money the city wanted didn’t outpace her earnings six-fold. Sure, the city has its rules; and yes, cash-strapped cities can’t very well ignore potential sources of income. But at the same time, there must be some room for discretion and common sense.
When Bess pressed her case to officials with the city’s now-closed tax amnesty program, she says, “I was told to hire an accountant.”
She’s not alone. After dutifully reporting even the smallest profits on their tax filings this year, a number — though no one knows exactly what that number is — of Philadelphia bloggers were dispatched letters informing them that they owe $300 for a privilege license, plus taxes on any profits they made.
Even if, as with Sean Barry, that profit is $11 over two years.
To say that these kinds of draconian measures are detrimental to the public discourse would be an understatement.
Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/philly-requiring-bloggers-to-pay-300-for-a-business-license-101264664.html#ixzz0xZe7zjT3
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