Why doesnt Starbucks charge sales tax for their products?
It depends upon the state. In most they do, and on both “here” and “to go” items. They include the tax within the price of the item in most areas. It’s a good question, and the easy answer is that they tax because they must, but Coffee Bean in California, say, doesn’t tax their “to-go” items, because they don’t have to, and that’s what makes it all confusing. Here’s why they tax. Nowadays in most states, like California, all hot and prepared food is taxable if 80% of the merchant’s sales are food and beverages and 80% can be possibly consumed on site, with tables, chairs, whatever. Some other states that tax “to-go” items have different formulas, but the idea is the same. But in states like California there is an exception for to-go hot food, bakery products and some cold foods that Coffee Bean takes advantage of. If the merchant petitions the Board of Equalization taxing authority, they don’t have to charge sales tax on these items as long as they keep records and charge separately fo