Don’t tax my yogurt
New Roche Bros. store taxes items by where they're bought, not what they are
FOR MANY, the new Roche Bros. supermarket in the old Filene’s building at Boston’s Downtown Crossing is manna from heaven. There is a large full-service grocery store in the old Filene’s Basement, and at street level, Roche Bros. has opened a ready-to-eat section for breakfast, lunch, and dinner featuring a salad bar, a hot food bar, and cases full of beverages, yogurt, snacks, and cut fruit.
But there’s an odd upstairs/downstairs disconnect on taxes at Roche Bros. A 5.3-ounce single-serve container of Chobani yogurt purchased downstairs costs $1.99. Upstairs, a short escalator ride away, the same Chobani yogurt costs $1.99 plus 14 cents in added meals tax.
Similarly, a bag of Farmer’s Crate Baked Coconut Thins costs $3.99 downstairs, while upstairs the same bag goes for $3.99 plus 27 cents tax.
Overall, the price tag for five items purchased downstairs came to $10.33. Upstairs, the five items cost exactly the same, but an extra 72 cents was assessed in taxes. Even the nickel deposit on a bottle of Poland Spring Sparkling Water was added into the taxable total upstairs, despite state regulations that exempt sealed beverages and bottle deposits from taxation.
Another Roche Bros. customer says she stopped by the store on the way home one evening and was in line downstairs when an employee helpfully suggested people could bring their items upstairs where there was no line at that time. She brought her items upstairs, where the cashier told customers that everything, including staples such as bread and milk, would be charged tax because that’s how the registers upstairs were set up.
Roche Bros. officials say most items sold upstairs at their ready-to-eat section are taxed to comply with state regulations requiring the collection of meals taxes on any prepared foods to be consumed as part of a meal. The state meals tax is 6.125 percent and Boston adds a .75 percent local option tax.
“The meals tax regulations are fairly complex and a little ambiguous at the same time,” says Paul McGillivray, the Roche Bros. vice president of sales and marketing. “It is the responsibility of the retailer to apply them.”
According to state tax regulations, grocery stores, convenience stores, and supermarkets have to charge meals tax “if the items are sold in a manner that constitutes a meal.” Among those items deemed taxable are hot meals, prepared foods, and entrees, even if refrigerated, if the store has a microwave or oven for reheating. Also taxable are beverages such as coffee or soda that are poured, and unpackaged snacks or baked goods.
Among some of the items deemed nontaxable are unopened beverages in a container if consumed off-premises; unopened, manufacturer-sealed snacks; or six or more of a baked good item.
Roche Bros. at Downtown Crossing appears to be taxing items based more on where they are sold rather than what they are. The reasoning behind that approach appears to be that people using the upstairs Roche Bros. are there to purchase ready-to-eat items.
Fashioning a supermarket tax policy isn’t easy. Many stores, for example, have salad bars. Customers who scoop up cut fruit at the salad bar will pay tax on the purchase because it’s considered a meal. But purchasing cut fruit in a container in the produce aisle won’t result in added tax. Supermarket delis sell sliced meats that are not taxed, but they also can use sliced meats to make a sandwich, which is taxable.
“I think it’s more that the supermarket has changed over the years,” he says. “There is a larger element of stores offering prepared foods than there were 20, 25 years ago.”