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A YEAR IN THE LIFE: SALT ACCOUNTANT Home cook i ng. Stop by you r loca l super market for your trad i- tional Tanksgiving dinner f xings – t u rk e y, pot atoe s , c r a nber r ie s , pumpkin, etc. – and you won't pay sales tax on those food items in most states. Tat's most, not all; 14 states tax groceries at either the full sales ta x rate or a reduced rate. T hese s t a t e s a r e A l a b a m a , A r k a n s a s , H aw a i i, Id a ho, I l l i noi s, K a n sa s, Mississippi, Missouri, Ok lahoma, Sout h Da kota, Ten nessee, Uta h, Virginia and West Virginia. Buying loca l? Some states, l i ke Vi rg i n ia, consider farmers and co-ops that sell a t o u t d o or m a r k e t s or t h r o u g h Community-Supported Agriculture (CSA) programs or websites to be engaged in "direct marketing." Since they sell to consumers or end users, sa le s t a x i s col lec ted on t a x able goods and must be separated out from the item price. Some states, like Kansas, also require sales tax to be collected on monthly CSA subscrip- tion fees. Eat out. Don't feel like cooking? You're not alone. A n estimated 14 million A mericans go to restaurants on Thanksgiv ing. Choose to dine out and there will be fewer dishes to wash but more sales tax to pay. Fif- teen cities impose an additional tax on top of state sales tax for restaurant me a l s . T he s e c it ie s a re B os ton , Charlote, Chicago, Denver, India- napolis, Jacksonville, Kansas City, M iami, M ilwaukee, M inneapolis, Omaha, R aleigh, Seatle, Virginia Beach a nd Wash i ng ton DC . T he add- on t a x r a nge s f rom . 05% i n Milwaukee up to 5.50% in Virginia Beach. Get it to go. Buy your pie already ba ked or get you r pot atoe s pre - mashed from the deli and you'll pay a litle extra for the convenience. A number of states, including M in- nesota, tax prepared food. Tis can include food that is heated before s a l e ; f o o d w h e r e t w o o r m o r e ingredients are mixed together; and food sold w ith eating utensils. So whether you order take out from a restaurant or a complete Thanks- g i v i n g f e a s t f r o m s u p e r m a r k e t catering, you'll likely pay sales tax. Get it delivered. Nowadays you can get gourmet meals delivered right to your door through popular food retailers like Harry & David and Williams-Sonoma and culi- na r y ser v ices l i ke Blue Apron, Platejoy a nd Fresh ly. You ca n shortcut having to shop or cook, but you can't shor t change the state when it comes to sales tax. If you only receive fresh or frozen ingredients in their original form or package, then you would be taxed according to food taxability rules for your state. If any of the items have b e e n r e - p a c k a g e d , c o m b i n e d , prepped or pre-cooked, then state sales and use tax rules for prepared items would apply. Hire a chef. In some states, like Wash i ng ton a nd Ca l i for n ia, per- sonal chefs or professional cooks are considered independent contractors and services provided by the chefs are subject to retail sales ta x . Te a mou nt of t a x i s deter m i ned by where t he c ustomer receives t he pr e p a r e d f o o d . I n t he c a s e of a home-prepared Tanksgiving meal, the sale tax rate would be based on the jurisdiction in which the host resides. Want to save a few bucks? Supply the ingredients. You'll only pay sales tax on the taxable items. If the personal chef does the shopping, the food is considered part of the service and, therefore, taxable. A nd when it comes to complex sales tax rules, the states really know how to pile it on: 50 states. 50 Sales Ta x R u l e s . 10 0 % F r u s t r a t i n g . Having a hard time stufng all this into your brain? Be thankful there's something easier: Sales tax automa- tion sofware. Kerry Alexander manages market- ing programs for Avalara. She writes about the business challenges of managing sales tax and the benefts of automating compliance. Let's Talk Turkey (And Sales Taxes) By Kerry Alexander T urkey and taxes. The U.S. has a long history of both. And in 2010, the two converged in Virginia as part of an annual Thanksgiving tradition where tribal and state leaders pay homage to a more than 330-year- old treaty: then-governor Bob McDonnell was presented with a turkey (and two deer) by tribal chiefs in lieu of taxes. Unfortunately, paying taxes in trade doesn't work for most of us. Depending on where and how you celebrate this year, your Tanksgiving feast could be served up with a side of sales tax. 12 November 2015 • www.CPAPracticeAdvisor.com