Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Meals Tax topic
No spam. Unsubscribe anytime.
Committee hears 'three‑item' rule for grocery bakery items: fewer than three taxed as meals
Summary
Staff restated Vermont's meals-tax rule that single or two bakery items sold for immediate consumption are subject to meals tax while purchases of three or more are treated as grocery sales and not subject to meals tax; staff flagged a possible different treatment at dedicated donut shops and said they'd follow up.
A committee briefing clarified a narrow meals-tax rule that affects bakery purchases in grocery stores: single or two items sold for immediate consumption are treated as a meal and are subject to meals tax, while purchases of three or more are treated as grocery sales and are not taxed as meals.
Kirby explained the practical effect: grocery bakeries typically will not package fewer than three items for sale because state law treats one or two items as being for immediate consumption. "If it's 1 muffin or 1 donut or 2, then that's considered to be for immediate consumption, and that's subject to meals tax," Kirby said. "If it's 3 or more, then the law says ... that's groceries, which will be not taxed at all."
A member asked whether the rule differs at a donut shop versus a grocery store. Kirby said there may be an extra wrinkle for dedicated retail bakeries and that staff would look into it. The committee recorded no vote; members asked staff to confirm treatment for purchases at specialty bakeries versus grocery-store bakery sections.
The briefing did not provide tax-rate detail or collection figures; staff offered to follow up with formal guidance.
