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ECON Food Stamps and Sales Tax Exemptions
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  1. #1
    Join Date
    May 2004
    Location
    Sandhills North Carolina
    Posts
    35,021

    Food Stamps and Sales Tax Exemptions

    ( Does EBT pay sales tax - No)

    http://www.salestax.com/blog/food-st...ax-exemptions/

    Food Stamps and Sales Tax Exemptions

    May, 2017
    Several months ago the United States Department of Agriculture published an analysis comparing food purchases by SNAP households and non-SNAP households.

    The USDA administers SNAP (Supplemental Nutrition Assistance Program), formerly known as food stamps. The analysis covers all purchases made in 2011 “from a leading U.S. grocery retailer” which is not identified in the study. The survey found that spending by SNAP and non-SNAP households followed similar patterns: Of every food dollar, about 40 cents was spent on basics such as meat, fruits, vegetables, milk, eggs and bread; about 40 cents was spent on assorted items including cereal, prepared food, other dairy products, rice, beans and other cooking ingredients; and about 20 cents was spent on sweetened drinks, desserts, salty snacks, candy and sugar.

    Depending on your policy inclinations, you might shrug and summarize the report as “SNAP households buy pretty much the same foods non-SNAP households buy” or you might be outraged, “They spend HOW MUCH on soda and junk food?!” Or maybe both. I’m pretty sure people can be ambivalent …

    The survey’s findings reignited the debate about which foods should be eligible to be purchased with SNAP. On the USDA’s web page describing eligible foods, they include a link to a paper about the implication of restricting foods that may be purchased with food stamps. The authors recommend not limiting food stamps to health(ier?) foods for several reasons, including the fact that there is no clear standard for identifying healthy food and because the complexity of administering the restriction would have significant costs.

    Most states exempt food for home consumption (or tax it at a lower rate), but many tax candy and/or soft drinks. Under federal law, states may not tax food that is purchased with SNAP benefits. If a customer buys a bottle of Coke with cash (or an equivalent like a check or credit card), that’s taxable in many states, whereas if the customer pays with SNAP, it is not taxable.

    When a customer pays part of the grocery bill with SNAP and part in cash, federal law requires that the SNAP benefits be applied to foods that would be subject to tax first. The federal prohibition on taxing food bought with SNAP means that some otherwise taxable food sales escape taxation. In fact, because orders bought partially with SNAP and partially with another form of payment must have SNAP applied to the taxable foods first, SNAP junk food purchases are slightly over-represented. Maybe a rounding error in the scheme of things, but an interesting observation.

    The same types of concerns about which foods should be eligible for SNAP also figure into states decisions about which foods are subject to sales tax. Most states that exempt food do tax some “junk food” or “luxury items.” States have different criteria for deciding what is taxable and what is exempt but there are similarities, especially in streamlined states that use common definitions.

    Defining healthy food is harder than you would think. Should calories be the determining factor? What about nutrients, either those the food contains or those it lacks? A stick of butter or bottle of oil is just fat but these are normally included in a balanced diet so fat content of a single item is not a very good indicator of whether the item belongs in a well-rounded diet. Orange juice contains more sugar and calories than diet soda, but no state with a food exemption taxes 100% juice, and non-caloric sweeteners may also be unhealthy so, again, a straight calorie reading may not be the best indicator. Dry breakfast cereals are often highly sweetened but they are also fortified with vitamins and minerals and face it, not everyone is having a bowl of unsweetened oatmeal with fresh fruit for breakfast. Even pure junk food can be part of a reasonably healthy diet when consumed in moderation.

    The fact that it’s so hard to identify healthy food plays right into the issue of complexity. Take candy, for example. Let’s say we agree that candy isn’t good for you and its consumption should be discouraged. What is candy? The Streamlined Sales Tax (SST) definition, adopted by a number of states, is “a preparation of sugar, honey or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops or pieces. Candy shall not include any preparation containing flour and shall require no refrigeration.” This clear definition is accompanied by SST appendix N, a 3-page list of items that are classified as being candy or not.

    At the federal level, the USDA has determined that the benefit of limiting SNAP to healthier foods is outweighed by the complexity of having to figure out if each item falls into the good or bad category. Businesses in most states have to deal with this item by item analysis, though, for sales tax purposes. There are some 40,000 items in the average supermarket so it is an enormous job!

    In a streamlined state that exempts food but taxes candy, someone in the supermarket tax department has to go through every candy-like item to see if it’s “commonly thought of as candy” (sugar cubes and barbecue potato chips are not so they are exempt), and if so, analyze whether the item is in one of the taxable forms (cotton candy is exempt because it is not bars, drops or pieces); check the ingredients for flour (licorice is often exempt, as are many cereal bars, but other cereal bars are taxable because they do not contain flour); and read the label to ascertain whether it requires refrigeration (ice cream is exempt.)

    The exemptions show how difficult and ultimately futile it is to use public policy (whether SNAP benefits or sales tax exemptions) to direct people away from consuming less healthy foods. The SST candy rules favor Kit Kats over Milky Ways and ice cream bars over chocolate chips. How does this promote public health, and what about the costs to businesses that have to code for this?

    The USDA has (for the time being, at least) decided not to make retailers engage in this sort of analysis to determine whether the item in question may be purchased with SNAP benefits, whereas a number of states do distinguish between types of food for sales tax purposes. If the USDA ever does change the rules so that certain junk foods are ineligible, how would they decide which foods are ineligible? Most states exempt chips, popcorn, pretzels and cookies, even if they tax candy and/or soft drinks, so businesses are not currently analyzing foods to see if they are snacks. The streamlined definitions of candy and soft drinks might be a start, but then retailers in non-SST states would have to run each item through two separate analyses to identify items that are eligible for food stamps and exempt from sales tax. If identifying “healthy” food under one set of rules is tough, doing it under two sets of rules will be excruciating!

  2. #2
    The "WIC" program is much more restrictive. The recipient is given several coupons per month depending upon the ages and number of people being served.

    You would typically have one or two coupons that specify a gallon of milk, a choice of either two cans of tuna, a pound of fresh meat or a bag of beans, a coupon for two boxes or bags of cereal. A coupon for rice or potato products and another for peanut butter. If there are infants, there will be numerous coupons for formula, or if the mother is breastfeeding, for specific foods designed to help support milk production.

    It is a superior system, but it is a nightmare to negotiate for the recipient, the grocery store and the state program administrations. The eligible brands and foods change based on a bidding or lottery system for the supplier. The check out process is a disaster (you will understand this if you have ever been stuck behind a WIC mom), and it is confusing to the beneficiary. They will often change brands which are allowed, and you won't know this until you get to the register and find out that Cheerios are no longer the brand that is allowed, you must now choose between Green Valley Oatie os or Kellogs flaky oats. Also, each coupon must be rung separately, making one cart of groceries take 5 or 6 separate lengthy processes and 5 or 6 receipts. Each coupon must have the price handwritten by the cashier of each item and must be checked for proper dates and amounts on the holder's folder which they keep the coupons in. You get different coupons dated for each week of the month, so everything must line up correctly or the manager has to come over to re-ring and correct the mistake.

    It isn't workable for the much larger population that receives SNAP.

  3. #3
    Join Date
    May 2004
    Location
    Sandhills North Carolina
    Posts
    35,021
    I thought WIC was just formula and milk and just for the mom and the baby

    Has It grown now to include all the family?

    It never ends - does it

  4. #4
    Join Date
    Dec 2007
    Location
    NE Arkansas
    Posts
    507
    I think the Mississippi system for WIC would work for food stamps. In that state the recipient goes to the local WIC distribution center to pick up their monthly allotment. All the available products are displayed and you are allowed to choose which products you want , much like shopping at the store. The clerk marks your choices and you are given your items boxed and ready to go.

    Here in Arkansas, it is a major pain. Not only do you have to locate the product you want, but you also have to figure out how many ounces of that item you are allowed and then mix and match eligible products to come up with the right amount. I have been asked for help/advice several times on the cereal aisle alone. And then there is the cheese....

    I think the Mississippi method would work just fine on a much larger scale. Of course, there wo0uld be plenty of people who would complain because they wouldn't be able to get the brand they wanted or whatever. However, it would save the taxpayer money. Why shouldn't the government be able to source foods at a much lower cost? Would it be more economical for the government to source and store large amounts of food? I don't know.

    As a taxpayer, I'd like to see the cost to taxpayers for food stamps go down. However, this would be seen as rationing I'm sure, and nobody wants to go down that road.

  5. #5
    Join Date
    May 2004
    Location
    Sandhills North Carolina
    Posts
    35,021
    What I KNOW is that food stamps are an underground curency, and tho issued for the kids, their crach head ho moms trade stamps frequently for cash or drugs

    So the food banks supplement the neighborhoods, but you can walk down the sidewalks and pick up foods discarded, like a bags or potatoes or cans of beets or fresh cabbage etc. they take what they don’t need or want just to take

    So the churches and schools step in - with preschool breakfasts, sack lunches and after school meals and evolved to School clothes drives and Christmas gifts

    Dealing with the side effects of crack head ho moms isn’t fixing these kids lives
    WE NEED TO DEAL WITH THE MOMs and the revolving door men to save the kids and the economy

  6. #6
    I can't see any reason why "they" are making this so complicated - in the modern era it should be pretty easy to have certain food electronically tagged as OK or perhaps not OK.

    As for healthy that is a political issue more than it is a nutritional one; even if all they did was ban the buying of processed soda drinks (that solves the fruit juice problem) that would go a long way to cutting back.

    Figure out a working definition of candy that includes processed, factory produced "flour products" with XYZ amount of sugar or the equivalent and you would really cut down.

    Not only that but some manufacturers would bend over backward to try to come up with "healthier" options that either lowered sugar content or otherwise improved the recipe to where the items were not total junk; they still might not be the world's healthiest foods but they wouldn't be total junk either.

    The real problem is historically when projects like this are tried they either go way overboard or become political and sometimes both - I remember one state "banning" the buying of both potatoes and bulk dried beans with SNAP because "poor people eat too many potatoes" and there was no reason given for the beans, the traditional healthy protein of the poor in the US.

    Note they were banning FRESH potatoes whereas the real "problem" would be the over-consumption of "oven fries" and other processed garbage; plain baked potatoes or fresh potatoes in stews etc are cheap and healthy for people who can eat them; they are not simply an "empty carb" like white refined bread is.

    What would NOT be a good idea would be another debacle like "Obama" school lunch menus translated into SNAP or food stamps with the micromanaging of stuff to the point where there is very little left that anyone actually wants to eat (along with being hugely expensive to try to carry out).

    A return to ration coupons (which is what WIC pretty much is in some places)would be better than a too complicated system to try and force someones "idea" of healthy eating - on the other hand, common sense says the taxpayers should be paying for Soda Pop.

    I thought that way when I was on food stamps in the 1980s and I still feel that way now; I also think there simply isn't the political will to take on the "Big Food" companies; who make vast profits on the current system.
    expatriate Californian living in rural Ireland with husband, dogs, horses. garden and many, many cats

  7. #7
    Join Date
    Jul 2018
    Location
    Panhandle
    Posts
    879
    I have always thought that we need a program that teaches people how to cook from scratch. Give them basic ingredients at a food stamp store, classes on how to cook healthy meals.

    I think it would go farther to educate and feed the temporarily less.fortunate than just giving them money to buy stuff on an approved list.

    Then they would actually have skills to make their own money stretch and provide cheap, nutritious meals for themselves and their families.

    Incorporate the farmers/ gardeners In to the mix, educating them on what and how to grow even a few things of their own, even if it is just some herbs in a pot in the kitchen.

    Then again, if I was running things, we would have kids in public school learning these things... And more. Such as CPR, first aid, how to cook, mechanics, plumbing, wood shop , HVAC...finances, buying and maintaining a home, car, relationship, etc..

    You know, real life skills. But then that would teach them to be self reliant, and we all know that does not seem to be the plan in place.

    They get twelve years of....???????


    It is a crime against all humanity that our children are not taught the things that will actually help them in the real world.

  8. #8
    Join Date
    May 2004
    Location
    N. Minnesota
    Posts
    12,207
    The WIC program is already in place, deemed healthy for pregnant/lactating moms and babies, and can be/already is incorporated into the check-out system at the stores. It would work fine for most people on assistance, and put more healthy food into people's guts. Yes, Walmart might go bankrupt if they couldn't sell chicken nuggets and pizza rolls I suppose, but what the hay.

    Just for grins and edification, here is the current Minnesota WIC list. They don't include fresh/frozen red meat or poultry, but really not necessary, (buy your own!) or could be added:

    https://www.womeninfantschildrenoffi...food-list-wf23

  9. #9
    Grand daughter about 10 yrs ago was checkout at a grocery store and was amazed at the number of food stamp types buying t-bone steaks and such. Must be eating well.

    Nope. They were exchanging them at a local restaurant for cash money. Which they could then exchange for booze.
    "The misfortune of many is the consolation of fools" Ancient proverb

  10. #10
    Join Date
    Dec 2007
    Location
    NE Arkansas
    Posts
    507
    There is too much overlap in food assistance, all at the expense of the taxpayer.

    If a mother has two children, ages 3 and 6, that family would get over $500 a month in SNAP alone. Then the overlap begins. Mom would get WIC for the 3 year old and the 6 year old really racks up.

    In my area, every child up to 18 has available to them, no questions asked, a free breakfast and lunch at the local schools. This is followed by a snack after school and supper at one of the 7 "community feeding centers" in my county. Add to that the weekend program that fills a backpack with food to be taken home each Friday.

    How is it then that the food banks are so busy?

    This is why food stamp fraud is so rampant. Parents aren't worried about feeding their children with food stamps and feel free to sell them so they can get their nails done.

    I would never begrudge a hungry child food, but it has gotten ridiculous.

    As an added note, The feeding centers are open to all regardless of age and there is a summer program in place at the schools to provide breakfast and lunch then as well. There is absolutely no reason that any person in this county should go to bed hungry.

  11. #11
    Quote Originally Posted by catskinner View Post
    There is too much overlap in food assistance, all at the expense of the taxpayer.

    If a mother has two children, ages 3 and 6, that family would get over $500 a month in SNAP alone. Then the overlap begins. Mom would get WIC for the 3 year old and the 6 year old really racks up.

    In my area, every child up to 18 has available to them, no questions asked, a free breakfast and lunch at the local schools. This is followed by a snack after school and supper at one of the 7 "community feeding centers" in my county. Add to that the weekend program that fills a backpack with food to be taken home each Friday.

    How is it then that the food banks are so busy?

    This is why food stamp fraud is so rampant. Parents aren't worried about feeding their children with food stamps and feel free to sell them so they can get their nails done.

    I would never begrudge a hungry child food, but it has gotten ridiculous.

    As an added note, The feeding centers are open to all regardless of age and there is a summer program in place at the schools to provide breakfast and lunch then as well. There is absolutely no reason that any person in this county should go to bed hungry.
    Here in NY State, which is arguably one of the states with the most benefits, WIC is only for pregnant or lactating moms and children up to 5. SNAP is income based and the amount that anyone receives is based upon income (whether from a job or welfare or family or other gifts) with restrictions on assets such as homes, cars, savings or property whether income producing or not and number of people in the family unit. You are docked for the WIC benefits you receive, you cannot get the WIC coupons without it coming off of your SNAP total benefit. The absolute maximum SNAP was recently reduced to around $180 per month per child and will go down depending upon your income or benefits from other sources. They also count "in kind" income, so that if you get rent in exchange for caring for an elderly person (for instance), they will dock you benefit by the "market rent" of the place you live. So if you get a room with a private bath and kitchen privileges, they would count that at appx. $450 per month income.

    One thing that NY has that Maryland did not when I lived there, was that here a household with no children is still eligible for SNAP as long as the single adult is willing to go to unemployment classes for 6 weeks (showing you how to get a job) and then they will assign you to a public work project suited to your qualifications unless you are legally disabled. So you might end up sweeping up at the YMCA or refilling flyer racks at the library or typing forms at the public housing authority. In Maryland adults were just not eligible for benefits, you had to have children in the household.

    One scam that young moms were perpetrating here is that there is a benefit of child care for working parents below poverty level. So these women were getting certified by the county to do child care and then getting a paycheck for babysitting each other's kids. So no one actually had a job, they were just exchanging kids for 50 hours a week and getting paid quite a good income for doing it.

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