Posted on 06/02/2009 11:53:28 AM PDT by freespirited
Colorado Restaurant Association Big Cheese Pete Meersman is afraid the city of Denver's Department of Revenue is jumping out of the frying pan and into the fryer.
At issue? During some recent restaurant-industry audits, the city has claimed separate sales tax on frying oil, claiming that the oil is a separate product because it is not absorbed into the product.
Try telling that to a cardiologist who wants you to cut down on French fries.
"Let's say you have a grilled cheese sandwich restaurant," Meersman said. "All the products you get in — including the oil, bread, cheese, garnishes — you don't pay sales tax on because you're going to turn around and add all those costs up, charge a price and the customer pays sales tax on top of that.
"The problem with trying to collect sales tax on wholesale cooking oil is that it is already being taxed on the retail side."
The city's vigilance in trying to collect a separate tax on oil has boiled to the point where Sysco Denver Food Service Co., the largest food-service distributor in the Rocky Mountain region, is disputing a $90,000 tax assessment on fry shortening.
"It's a new interpretation by someone new in city government to try and tell us shortening is not part of the food," said Sysco president Chris DeWitt. "We've never been taxed (on oil) before. This puts an undue hardship on the distributor who eventually must pass that cost along to our (restaurant) customers."
But Mayor John Hickenlooper's spokesman, Eric Brown, says the sales-tax ordinance "has been around for some time. If someone feels that the ordinance should change, then they should take it up with the City Council."
As a former restaurateur, the mayor has recused himself from jumping into this debate.
Meersman has tried to get the city to see his point about this issue, but says his words have fallen on deaf ears.
What's next, he argues? "Are they going to start charging sales tax on potato peelings? Uneaten chicken bones? The water that's used to boil pasta? Clam shells? There are a lot of things that go into food preparation that we charge our customers tax on that never end up on the customer's plate. We've been working for months to convince them they're wrong. So far, we've been unsuccessful."
And then he wins one.
I told you in March that the Colorado Restaurant Association was pushing Senate Bill 121 to clarify the language of a 1978 law, sponsored by former state lawmaker and former U.S. Rep. Joel Hefley, that exempted employee meals from state sales tax.
The bill was introduced when the Colorado Department of Revenue attempted to collect sales tax on reduced-price or free employee "shift meals."
"The law banning state sales taxes on employee meals (again) goes into effect Aug. 4, 2009," Meersman said. "It passed unanimously in both the House and Senate."
Let's see. Plain potatoes are low in fat. French fries are not. So the french fries must absorb a fair amount of the frying fat ...
Is that really too hard for a city employee to figure out?
Idea - Thought + Action = Government
It sounds like the first step in the Value added tax
that is slap yo momma stupid
yes it does
tax the seed seller, tax the farmer, tax the potato distributor, tax the potato chip company and tax the store that sells the potato chip.
How much will that 99 cent bag cost after all that?
Mr. Meersman needs to be careful. The tax and spend nimrods are already taking note.
Here's one suggestion they won't take: Keep taxes low and simple. The resulting economic activity which low taxes and simplicity stimulate actually results in higher tax revenue than would be collected otherwise.
most politicians are lardass poppin-fresh doughqueers or twink fartbox queens that could not change a flat tire if their life depended on it... so what makes them think they can come up with rules and tax on fitness and health
99 cents. But the bag will have only a single potato chip in it.
Logic borrowed from Interstate Commerce use.
that is so true.
am I the only one who dreams that just maybe the Stargate is built by people trying to escape from government??
can’t have the Californicating Ecoweenies burning french-fry oil in their converted BMW’s and evading motor fuels tax...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.