Tax Tip of the Day: Sale of Bakery Products In Florida

To provide clarification of tax concerns for bakery products sold by bakeries, pastry shops, and other like establishments, the State of Florida states that Bakery products are taxable when:

• Sold for intended consumption on the premises.
  • Bakery products sold in quantities of five (5) or less are assumed to be sold for consumption on the premises.
• Packaged in a manner consistent with consumption on the premises.
• Sold as hot prepared food products regardless of where or how they are sold.
  • Bakery products sold while still warm from the initial baking are not hot prepared food products.
  • Bakery products that are kept warm by a heat source used to maintain them in a heated state, or to reheat them, are hot prepared food products.

Bakery products are exempt when:

• Sold for intended consumption off the premises and
• Packaged in a manner consistent with consumption off the premises (examples include packaging that is glued, stapled, wrapped, or sealed).
• Sold by bakeries, pastry shops, and other like establishments that do not have eating facilities.

Example: A bagel shop operates an establishment with eating facilities and makes a single sale of three bagels. The bagels are taxable unless the seller can establish that they were packaged in a manner consistent with an intent by the customer to consume the products off the seller's premises.
Exempt sales of bakery products for consumption off of the premises are required to be separately accounted from taxable sales. Examples include:

• Using sales invoices which contain documentation that the sale of the bakery product is for consumption off of the premises.
• Using a separate key on a cash register to record tax-exempt sales of bakery products.
• Using a separate cash register to record tax-exempt sales of bakery products.

Example: A bakery operates an establishment with eating facilities. The bakery sells donuts, toasted bagels, and other pastries, as well as coffee and other drinks. The bakery sells bakery products to patrons who take the products in sealed containers for consumption off of the premises. Products sold for consumption on the premises are served to the customers on trays. The bakery uses separate keys on its cash registers to account for the sales of tax-exempt bakery products for consumption off of the premises in sealed containers separately from the accounting for taxable sales of toasted bagels, coffee, other drinks, and bakery products for consumption on the premises. The bakery products sold for consumption off the premises are exempt, because the bakery's packaging and accounting methods are consistent with a manner of consumption off of the premises.

For the complete text of the law reference  Section 212.08(1), Florida Statutes and Rule 12A-1.011(3), Florida Administrative Code or visit the State of Florida's Tax Payer Services at www.myflorida.com/dor or call 800-352-3671.

Just keeping you in the loop~ Envision Tax & Accounting Services of Florida (407) 951-1492