NY taxes sliced bagels; Unsliced, they're exempt

Forget about a tax cut. The state is now imposing a tax on cuts.

A recent audit by the state Department of Taxation and Finance (DTF) slammed 33 Bruegger's Bagels franchises for failing to charge sales tax on sliced bagels. Unsliced bagels are exempt.

The audit also found that Bruegger’s failed to charge tax on meals consumed on the premises.

The state slapped the owner with a hefty bill for back taxes and demanded that he begin collecting.

In response, Brueggers posted a sign at its registers which reads: "New York State is requiring that all sliced bagels and all food eaten on our premises be taxed. We apologize for this change and share in your frustration of this additional tax."

DTF spokeswoman Susan Burns said her agency was in the process of preparing a "food bulletin" to remind all restaurateurs of their sales tax collection obligations. For the most part, foods consumed in an eatery's dining room are taxable while those taken "to go" are exempt.

An increased number of audits will follow the distribution of the bulletins, Burns said.

Burns told CBS 6 that New York is stepping-up enforcement of the 45 year-old sales tax law because DTF now has a bigger staff, better technology, and more access to third-party information. However, some skeptics counter that it's because the state is actually broke.

Said Chuck Butcher, a Niskayuna native: "The state wants to get money any way [it] can."