Sale Tax Change For Prepared Foods Andrew Platt Attorney at Law Woods Erickson Whitaker & Maurice LLP 1349 W. Galleria Drive Henderson, NV 89014 Telephone: 702.433.9696 Baked goods go tax-free in time for the holidays All bakeries should investigate whether they can stop charging sales tax. The Nevada Tax commission just published new regulations on the taxability of prepared foods. Baked goods have long been a grey area because the applicability of sales tax to food hinged on the way it was sold. Buying a bagel on a plate meant it was for "immediate consumption" and taxable. Buying a box of a dozen for the office meant that, technically, no tax was due. But check your receipts you were probably still charged tax because the bagel shop didn't want to deal with case-by-case tax law determinations! Even the rewritten rules have new twists especially when it comes to whether food is sold with utensils. But bakeries and some other businesses affected by the new sales tax standards can breathe a delicious collective sigh of relief; the clarifications give this area of law needed certainty. Too frequently, confusion over tax rules mean businesses pay more than the law really requires just to keep the Department of Taxation out of their way. Our firm's tax controversy practice sees businesses facing increasingly aggressive action by the Department. Businesses find it difficult to take on the Department by themselves and often settle even when they know that they did nothing wrong. Business owners understand that tax revenue is down and that Department of Taxation employees are under great pressure to increase collections. But where the law is on their side, the businesses don't have to give in. So next time you pick up any pastries or baked goods, tell the cashier they may be overcharging on sales tax. If the new rules apply to them, your next purchase could be that much cheaper. Andrew Platt helps business owners manage tax and other government regulations and advises businesses in structuring investment and compensation. Reach him at aplatt@woodserickson.com