Starting Friday, Mainers will be required to pay state sales tax on hundreds of food and beverage products that previously were tax-exempt, including fruit gummies, chocolate chips, marshmallows, potato chips, dips, beef jerky, sports drinks, granola bars, trail mix, cookies, pastries, ice cream, and precooked frozen cakes, pies and sandwiches.
The broad expansion of taxable grocery items is part of a two-year, $6.7 billion budget plan lawmakers approved in June, which contains modest property and income tax cuts. In exchange for those cuts, it retains the existing 5.5 percent sales tax for non-exempt grocery items and 8 percent tax for prepared meals, while making more products subject to those taxes. State officials have estimated that the change in sales tax policy will generate an additional $97 million in revenue in the 2017 fiscal year.
Major retailers said they are ready to implement the new taxes Friday.
“We’re fully prepared,” Hannaford spokesman Eric Blom said. “The systems are in place.”
Most grocery staples remain tax-free: fruits, vegetables, meats, bread, rolls, cereal, peanut butter, jelly, milk, cheese, eggs and frozen meals that have not been precooked. Other products including maple syrup and sugared coffee drinks will remain untaxed for reasons that are unclear. A few of the exemptions are downright confusing. (Cheese spreads will not be taxed, but cheese dips will be.)
A bulk exemption for certain desserts at grocery store bakeries no longer applies under the new budget plan. Before the change, doughnuts purchased at the in-store bakery would not be taxed if the customer purchased at least six. That bulk exemption now applies only to certain non-dessert items such as dinner rolls.
Products already subject to sales tax will remain so, such as alcoholic beverages, medicines, vitamins, dietary supplements, soft drinks and candy. However, the definitions of some taxable categories have been expanded, and new ones have been added.
Here’s a rundown of all the major categories of food and beverage subject to sales tax in 2016, with examples of items that previously were not taxed:
Confectionary spreads: Marshmallow Fluff, Nutella, chocolate spreads, frosting.
Candy: Sweetened baking chocolate, chocolate chips, candy sprinkles, processed fruit snacks.
Soft drinks: Juice drinks (less than 50 percent fruit or vegetable juice), energy and sports drinks, lemonade.
Powdered and liquid drink mixes: Instant breakfast drink mix; powdered fruit drink or ice tea mix; hot cocoa mix; liquid coffee, tea or juice concentrates.
Sandwiches and salads: Hot Pockets; precooked, frozen breakfast sandwiches; deli case coleslaw and potato salad.
Supplemental meal items: Potato chips, corn chips, pretzels, crackers, popped popcorn, salsa and all dips.
Fruit bars, granola bars, etc.:
Trail mix; breakfast bars; rice cakes; dried, sugared fruit.
Processed or treated nuts and seeds: Salted nuts and seeds, roasted nuts and seeds, smoked nuts and seeds, spiced or seasoned nuts and seeds.
Desserts and bakery items: Doughnuts, muffins, cookies, pudding and gelatin (ready to eat)
Frozen desserts: Ice cream; frozen yogurt; ice pops; thaw-and-serve cakes, pies and pastries.
Dessert sauces: Chocolate syrup, fudge topping, whipped topping.
Meat snacks: Beef jerky, pepperoni sticks (snack size).
Bundled products: Kraft Lunchables; meat, cheese and cracker trays; vegetable and dip trays.
J. Craig Anderson can be contacted at 791-6390 or at: