You make the call: Are Yoo-Hoo, frappuccino taxable?
August 25, 2008 by Shane BorerPosted in: "They're saying WHAT is exempt??", Assessments, In this week's e-newsletter, Latest news & views, Sales and use tax missteps
Wonder no more: An advisory panel has finally answered this age-old question.
But the answer’s more complicated than you think.
A Wal-Mart store located in Bentonville, AR, sold both Starbucks frappuccino coffee drink and Yoo-Hoo chocolate drink in glass bottles. Unsure of whether or not these items were taxable or exempt, the company’s headquarters submitted an in-depth petition on behalf of its NY stores to the state’s advisory panel looking for clarification.
The Taxation and Finance Department issued good and bad news to the chain: Frappuccino is exempt, but tax needs to be collected on sales of Yoo-Hoo.
For this specific frappuccino beverage, the main ingredient used in its production is brewed coffee. The panel ruled the beverage is, essentially, a flavored, cold coffee, and coffee is exempt from sales tax. But the myriad of ingredients used in Yoo-Hoo don’t qualify for an exemption — although it contains small amounts of cocoa, it’s considered a non-carbonated, flavored soft drink.
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Tags: Frappuccino, New York, Starbucks, Yoo-Hoo

