Is That Banana for Here, or To-Go?

Obscure Florida sales tax laws are costing retailers.

May 15, 2015

TALLAHASSEE — The Florida legislature is in turmoil over a proposed budget package including numerous tax cuts. As various parties have delved into some of the more obscure aspects of the state’s sales taxes, it’s become clear that there are some very confusing taxes on the books, and they could be negatively impacting retailers..

Take the so-called “banana tax,” for instance: In Florida, if you buy a single banana at your local corner store or coffee shop to eat while sipping your coffee in-store, it’s subject to the 6% state sales tax. Buy it to go, and it’s untaxed.

The distinction between when edible items are groceries and when they’re restaurant fare is a vexing one for retailers, as detailed in a recent article in the Tampa Tribune. When in doubt, retailers will often charge the tax, just to be on the safe side.

Florida TaxWatch, a nonprofit watchdog organization, has uncovered several other examples of how the state splits hairs. For instance, marshmallow candy is taxable while marshmallows are exempt. Ice cream and frozen yogurt isn’t taxed if you buy it in containers larger than a pint, but is taxed if sold in pints or smaller. If baked goods are kept warm, they are taxable as “hot prepared food” but if that same item just happens to be warm from its initial baking, it’s exempt from sales tax. And cut-up fruit in a package is not taxed, unless the package also includes a plastic knife and fork. That’s an awful lot for any retailer to keep track of.

Like most states, the general idea is that groceries aren’t taxed but food you eat in a restaurant is, TaxWatch’s Vice President of Research Kurt Wenner told the Tampa Tribune. “Of course, wherever you run into blurred lines is where you get into trouble. For instance, there’s always the question of what is a ‘grocery’ and what isn’t. So this is a problem, both for the state and for the retailers.”

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