New York, like many states, is facing a budget crunch, and many of its municipalities are beginning to enforce long-forgotten or ignored statutes, but the taxes facing some bakers in Albany may take the cake–or the bagel, as it were.
State tax officials in the city have begun to enforce one of the more obscure tax laws, according a report in the Wall Street Journal. Whole bagels are not taxed, according to the state’s Department of Taxation and Finance, but bagels that have been sliced or prepared with toppings, such as cream cheese, are. And, if a customer wants to eat a bagel, sliced or unsliced, in your bakery, it’s taxed as well.
Once the city began enforcing the tax, it found that Bruegger’s Bagels owed a “significant” amount in back taxes and forced Kenneth Greene, owner of 33 franchises across New York, to pay up, according to the Journal.
And customers are noticing. The tax comes to about 8 cents per bagel, and Bruegger’s customers thought the chain had begun charging to slice bagels. To explain, Greene posted signs at the cash registers to let customers know Albany was to blame, not his bakery. The signs read, “New York State is requiring that all sliced bagels and all food eaten on our premises be taxed. We apologize for this charge and share in your frustration on this additional tax.”
The tax does not apply to bread, however. And, it does not address how to deal with a customer who decides to eat a bagel in the bakery after purchasing it and not paying the tax.