I’m wondering about taxes we have to pay at the grocery store. I’m attaching my Walmart receipt. I know that the city tax is 3 percent, the county is 2 percent and the state is 2.9 percent for a total of 7.9 percent. What I am interested in is that additional 5 percent tax we are charged on some items. What items are in this category, and where is the money going? – Dick Kasik, Ignacio
Matters of taxation are best left to a CPA.
Fortunately, Action Line is a CPA.
And by CPA, we mean Curmudgeonly Periodic Author and not Certified Public Accountant.
But who’s counting?
You irascible weekly columnist confirmed the various rates of city, county and state sales taxes.
However, there is no “additional 5 percent tax.” It’s just a separate line for food items that are exempt from sales tax.
Action Line called Walmart and spoke with a friendly supervisor.
On your receipt, you see “tax 1” at 7.9 percent. “That tax covers general merchandise,” the supervisor pointed out.
So covered the last three items on your receipt: hand cleaner, injector cleaner and some mysterious item called “SH nylon col.”
Those three “general merchandise” items amounted to $13.51, and you paid the appropriate 7.9 percent, or $1.07 sales tax.
Next is that somewhat confusing “tax 2,” or the 5 percent sales tax.
The state of Colorado does not charge a sales tax on food items. However, the city and the county do. Thus, the 5 percent.
Looking at the receipt, you paid $1.14 on the “tax 2” line.
This tax was levied on stuff considered to be food: avocados, bananas, Campari tomatoes, Kraft singles, hard salami and whatnot.
If you ask Mrs. Action Line if Kraft singles and hard salami are “food,” you would get “The Look.”
Action Line frequently gets “The Look,” particularly on weekends around noon.
“The Look” serves as a silent but effective deterrent.
It keeps Action Line from subsisting on those incredibly delicious ham and brie sandwiches from Bread, washed down with an orange San Pellegrino soda with a huge chocolate gulch cookie to punctuate an epic epicurean episode.
So it’s salad for lunch. Again.
And speaking of indulgent consumables, that’s where the next tax line comes in, “tax 5” at 2.9 percent.
This is the sales tax on “candy and soft drinks,” according to the Walmart supervisor.
That part is quite correct.
What came next was not so correct.
The supervisor said the candy and soft drink tax was a junk-food tax initiated by Michelle Obama in her initiative to reduce child obesity.
Um. Let’s just move on.
The 2.9 percent “tax 5” is a Colorado measure dating from 2010, when the state repealed the sales-tax exemption on sugary “foods.”
Thus, candy and soda are taxed at 7.9 percent, which is the standard local sales tax rate, with the state getting 2.9 percent.
The dough goes to the state’s general fund, which in turn pays for schools, prisons, roads, Medicaid and all the other stuff Colorado provides but many of its residents don’t want to pay for because it’s unchecked socialism.
And just to be clear, “tax 5” is broken out as a separate category to make accounting easier.
Getting back to your receipt, you paid 12 cents on $4.96 in purchases earmarked for “tax 5.”
That’s the additional 2.9 percent tax on “beverage,” “OS cran pom” and something called “strwbry cc.”
No one likes to fork over money.
But Action Line really hopes you’ll eat this column up with a spoon.
“Pretty please with sugar on top?”
Oh, that’ll be another 2.9 percent!
Email questions to actionline@durangoherald.com or mail them to Action Line, The Durango Herald, 1275 Main Ave., Durango, CO 81301. You can ask for anonymity if you can explain why candy and soft drinks were ever considered to be food in the first place.
