The first time I shopped for groceries in Atlanta in 1981 I was shocked to see sales tax added to my bill- I was buying milk and bread (really). Welcome to the crazy tax laws of different states.

Ohio has long excluded taxes on food- as it’s not really optional for survival. This is a good way of providing a tax break to poor people- who would, proportion to income, be paying a higher percentage of tax if food was taxed.

Buried in the paper today- was an article that the Governor wants to start taxing groceries to make up for changes in the business inventory taxes that penalized companies who carry large inventories year round (another stupid system).

Interesting to see who is supporting the higher food tax: Doctors and Lawyers- people who are generally higher up on the food chain:

The Strickland administration asked the Ohio Supreme Court on Friday to restore a tax on groceries that was struck down by a state court of appeals.

The commercial activity tax was a key part of a massive tax code revision by the Legislature in 2005 and was expected to start generating $188 million a year in 2010, when it was to be fully phased in. The Ohio Grocers Association challenged the tax in a 2006 lawsuit.

A Franklin County court ruled in favor of the state, but that was overturned by the 10th District Court of Appeals last month. The appeals court determined that the tax, known as CAT, unconstitutionally taxed sales of food by supermarkets and wholesalers for consumption elsewhere.

The state contends that the tax is beneficial because it’s structured to be business-friendly and to replace taxes that discourage major business investments in Ohio.

Several organizations, including the Ohio State Medical Association and the State Bar Association, filed briefs Friday supporting the state’s position.

“Businesses have a vested interest in ensuring that this tax is applied fairly and equitably,” said Eric Burkland, president of the medical association. “Fair tax policy enhances our business climate and our quality of life.”

Ohio seeks restoration of grocery tax.

If we were really looking for a failure to tax evenly- we would place a national sales tax on Internet sales, that was distributed nationally per capita. This is an area where those with means shop to avoid paying sales tax while those who can least afford to pay higher prices don’t have a way to escape it.

The state tax coffers across the nation have seen declines in sales tax revenue because of this loophole, yet trying to implement systems online for collecting and distributing sales tax at different rates for every jurisdiction would be next to impossible and a huge burden on business.

Tax on groceries bad. Tax on Internet purchases good. Tax collection simplified for business- extra good. Dayton Daily News burying this story: priceless. And, btw- there is no sales tax on newspapers in Ohio…. go figure.