NYS Hitting Taxpayers’ Pockets On Bagels, Coffee, Even Cake

Sudden Enforcement Of Confusing Laws Make Residents Irate

NEW YORK (CBS 2 / WCBS 880) — New York State is facing record deficits.

But now officials are finding some creative ways to fill up the tax coffers — like hitting you up at the local bagel shop.

CBS 2 consumer reporter Kirstin Cole found a lot of little ways we’ll all be paying more.

Ess-A-Bagel’s specialty is about to cost more. Not a price hike from them, but from the state, and it all depends on how you slice your bagel.

“It’s almost one-tenth the price of the bagel. It’s going to be hard on people,” one person said.

LISTEN: WCBS 880’s Sean Adams reports from Bronxville

New York State’s Department of Taxation and Finance has started auditing bagel shop owners, saying if you slice it or serve it in store it needs to be taxed. That was news to Florence Wilpon, a bagel maven for 34 years.

“I just found out today you’re supposed tax bagels that are cut,” Wilpon said. “Customers will also be angry they’re purchasing a product that has never been taxed.”

The issue bubbled to the surface with Bruegger’s bagels in upstate New York, which sells 12 million bagels a year. They were just hit with a whopping bill for three years of bagel taxes.

“The bill they sent us for that is exorbitant. We hired an attorney,” owner Kenneth Greene said.

New York State’s only guidelines say that bagels are tax exempt as bakery products. But once they’re handled, they get called prepared meals. Greene said he’s fighting New York’s interpretation that a sliced bagel or a whole bagel eaten in the store should be taxed.

“We’ve been audited three or four times in the last 15 years and never once has this issue been raised,” Greene said.

Here’s where it gets sticky. Buy a bagel at a grocery store and you won’t pay taxes. But have them hand scoop it into a container? This you’re going to pay extra for.

Other ways New York State is putting a hand in your pocket, including hitting you when you order your coffee regular. If you do it from your favorite deli, you get taxed. But if you pour it yourself there’s no tax. If you buy a slice of cake you will get taxed. But you buy a whole cake or any other pastry you won’t get taxed.

Are you confused yet?

“Oh my goodness, that’s terrible,” said Chickie Dioso of Midtown East.

“I don’t see why it should be more in store,” added Beth Codos.

“Gotta stop it. It’s enough already,” said Diana Dell.

It’s a tax that’s leaving a bad taste in many a New Yorkers mouth.

While this is not a new tax law, bagel shop owners Cole talked to said it is a new enforcement of the law. New York State wouldn’t comment except to say it conducts thousands of tax audits annually.

  • http://newyork.cbslocal.com/2011/02/19/bankruptcy-takes-a-bite-out-of-hh-bagels/ Bankruptcy And Chapter 11 Takes A Bite Out Of Famed New York City Bakery H&H BagelsCBS New York

    […] Bagel Shop, Pizzeria Spar Over NYC Water | Brooklyn Shop Giving Away 1 Million Green Bagels | NYS Hitting Taxpayers’ Pockets On Bagels, Coffee, Even Cake The court filing listed $5.1 million in debt. The company said it believed it could […]

  • Gibson

    taxes and more taxes… when does it stop? officials keep getting bigger pay and i wonder from where? where does the bagel tax go? which government pocket is sucking up the profits of this horrific slicing tax???????


    Me – Bun the Scientist – did big study on 6 human two year ago. Find out IQ difference between people who eat bagel and people who do not eat bagel. Put 3 in cage together, 3 in another cage together. Feed one cage bacon and block of cheddar cheese. Feed other cage box of bagel. Come to find out people who eat bagel are dumb – have IQ much lower than people who eat bacon and cheese. People who eat bacon and cheese breakout of cage because smart like Sloth from Brockbuster movie The Goonies. People who eat bagel talk too much, don’t watch enough television, which is where intelligence come from. I back up this study because I do same experiment with cages of dogs. Find dogs in cage with box of bagel bark all day, wag tail with stupid look on face, chew on FAKE rubber bone. Now, the cage of smart dog who eat bacon and cheese, they chew on REAL bone because not dumb, bark very little, no wag tail, just drool all over bars so can squeeze out. I now believe it proven fact that people who eat bagel have small brain and low IQ.

  • http://newsfeed.time.com/2010/08/25/bagel-tax-new-york-state-cracks-down/ Bagel Tax! New York State Cracks Down - TIME NewsFeed

    […] of Taxation and Finance is ramping up its audits on a subtle food tax policy. CBS 2 New York breaks down the issue that is threatening to slice one upstate bagel chain's bank account — what constitutes a […]

  • A Concerned Citizen

    This is just down right ridiculous. It goes right to the heart of corrupt Albany politics and their twisted sense of “BLIND” justice. Not only is it a travesty in its own right, but it is also a straight up dis to the fine people of New York City and Long Island. What the hell is next, a tax if I only want two slices instead of a whole pie? This is just another sterling example of why real New York needs its independence from ultra-liberal Albany.

  • Karen Money

    I have tried three times to get this section to work.
    Last night’s report on sales tax was the worst case of making news insteasd of reporting news I have seen. People in the business of selling things KNOW what is taxable and what isn’t. If they choose not to report and pay the taxes then they are committing a crime and should not be made to look like they are the good guys being picked on by the state.
    The story should be if they were audited by the state and noting happened to them over the years WHY.

  • Jim K

    Just another reason to vote out every blood sucking incumbent from NYS office. I don’t care what party they’re in they all deserve to go!

  • rugbyball

    As much as I agree with you the Govt dont care, people will always move to NYC. If you own a house and leave, guess what you have to sell it to someone else, doubt you’d just abandon it. They will now pay the taxes you wont. To the city, they dont care who pays, as long as some one pays.
    If you rent and move out of state, well someone will just move into your now vacant apt. Just how it goes and they know it, so no fear to them. I hate it but the only real solution is voting them out. The only thing they DO fear, o ya and the occasional ethics investigations. But they don’t happen enough as they should!!!

  • Mary

    What are local government officials going to do when millions of NYers move out of state? Several co-workers of mine recently moved to Texas, and Florida. They have no regrets and are quite pleased with all the money they are saving due to the lower cost of living in those two states.

  • FCR

    If you live in NY, get out. They will one day figure out how much air you breathe and how long you use your toilet and tax you for it. You think I’m joking? Read this story above again.

  • eddie

    NY makes me sick to my stomach. All these tax & spend democrats need to be fired NOW. I contemplate leaving every day & one of these days God will grant my wish. I will not miss this dirty, stinkin, overrated state.

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