Free Ice Cream With A Sprinkle Of Tax Facts On National Ice Cream Day

It's National Ice Cream Day. And in case you think that it's a holiday made up by scheming kids to convince parents to give them ice cream (I wouldn't put it past mine), it's a real holiday. Well, real-ish.

National Ice Cream Day, as well as National Ice Cream Month (I'm not kidding), are "official" holidays designated by then-President Ronald Reagan following a joint resolution from Congress. The resolution, S.J.Res.298, was signed into law on July 2, 1984. The text of the declaration is as follows:

Whereas ice cream is a nutritious and wholesome food enjoyed by over 90 per centum of the people of the United States; Whereas the ice cream industry with approximately $3,500,000,000 in annual sales provides jobs for thousands of citizens and uses nearly 10 per centum of the milk produced by United States dairy farmers, thereby contributing substantially to the economic well- being of the Nation's dairy industry; and Whereas ice cream enjoys a reputation as the perfect dessert and snack food, and over eight hundred and eighty-seven million gallons of ice cream were consumed in the United States in 1983: Now, therefore, be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled. That July 1984, is hereby proclaimed as "National Ice Cream Month", and July 15, 1984, as "National Ice Cream Day", and the President is authorized and requested to issue a proclamation calling upon the people of the United States to observe ice cream month and ice cream day with appropriate ceremonies and activities.

So there you have it: it's the law that you should observe the day with "appropriate ceremonies and activities." For most of us, that means eating a little ice cream. And boy, do we ever: according to the International Dairy Foods Association (IDFA), the average American consumes more than 23 pounds of ice cream each year. The result is an $11 billion industry that supports 26,000 direct jobs and generates $1.6 billion in direct wages. And, the IDFA found that the majority of U.S. ice cream and frozen dessert manufacturers have been in business for more than 50 years: many are still family-owned businesses.

Ice cream has long been popular in the United States. Ice cream made its debut in America even before we declared independence. President George Washington shared a love of the frozen treat, designating approximately $200 for ice cream during the summer of 1790 - adjusted for inflation, that works out to an ice cream budget of about $2,862.54 (we should all be so lucky).

Presidents Jefferson and Madison likewise enjoyed a good scoop or two of ice cream. President Jefferson's recipe for vanilla ice cream was so important that he wrote it down. It's now on display in the American Treasures of the Library of Congress (you can see a copy of the recipe here.)

Despite the fact that our politicians enjoyed the good stuff, ice cream was pretty much a treat for the rich until the mid-19th century when technology (like freezers and steam engines) made it more available to the masses. Nearly a hundred years later, Americans were consuming over 20 quarts of ice cream per person annually.

Ready to grab some ice cream now? Before you run out to the ice cream truck, hold onto your wallet. Whether you'll pay sales tax on top of the price of that ice cream depends on where you live.

Five states do not have a state sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon). Most states, however, do have a sales tax on prepared foods, but the rules can be complicated.

In Arkansas, for example, ice cream purchased at an ice cream shop is likely taxable, but if purchased at a grocery store, ice cream (packaged, not made or served by the seller, including toppings and novelties) is generally eligible for a reduced sales tax rate. Similarly, in Virginia, certain types of vendors are presumed to be sellers of food for immediate consumption, including ice cream stands and trucks. In Washington, prepared foods are taxable and include foods sold with utensils provided by the seller, including yogurt or ice cream cups that are packaged with wooden or plastic spoons.

In some states, including Alabama and South Carolina, groceries are generally taxable. What's considered a grocery item, however, can vary from state to state.

Not surprisingly, some states have more of an incentive to get you to buy. In Iowa, the 4th state in the country for ice cream production (and 12th in total pounds of milk produced), milk and milk products, including packaged ice cream products are exempt from sales tax. Similarly, Indiana, the 2nd state in the country for ice cream production, also generally exempts ice cream from sales tax.

California leads the nation in ice cream production and yes, they also generally exempt "milk and milk products, including ice cream, ice milk and ice cream and ice milk novelties, sherbets, imitation ice cream, and imitation ice milk, dried milk products, sugar of milk, milkshakes, malted milks, and any other similar type beverages composed at least in part of milk or a milk product and requiring the use of milk or a milk product in their preparation." Another quirk? In California, tax applies to "sales of sandwiches, ice cream, and other foods sold in a form for consumption at tables, chairs, or counters or from trays, glasses, dishes, or other tableware provided by the retailer or by a person with whom the retailer contracts to furnish, prepare, or serve food products to others." But beware: while it includes drive-ins, a passenger's seat aboard a train or a spectator's spot at a game, show, or similar event is not a "chair,” and tax doesn't apply.

Plain ol' ice cream is the most popular category of frozen desserts: U.S. ice cream companies made more than 898 million gallons of regular ice cream in 2015. But what about mix-ins? That's a whole other level of complication. In Wisconsin, prepared foods for immediate consumption are taxable. But ice cream used in other forms - like cake - is not considered taxable.

Sales tax rules are incredibly specific. Sometimes, all it takes is leaving the premises or adding a topping to make something go from nontaxable to taxable (and vice versa). Numerous exceptions apply - and sometimes, these exceptions, like California's "80/80 rule" are based on a formula that is practically invisible to the consumer. But even crazy sales taxes haven't dampened enthusiasm for ice cream lovers in this country.

When it comes to flavor, most folks prefer plain vanilla. For some inexplicable reason, the most popular flavor in my state (Pennsylvania) is brownie; those of you who know me would agree that my home state of North Carolina’s favorite flavor (coffee) makes more sense. You can find out what your state prefers here.

No matter where you live, if you’re looking to grab some ice cream today and don’t want to put a dent in your wallet, take advantage of some free offerings:

And let’s not forget about our four-legged friends! PetSmart® is offering a weekend of free, dog-friendly ice cream topped with dog biscuit treats at PetSmart PetsHotel® locations across North America on Saturday, July 20, and Sunday, July 21. Dogs can get a four-ounce, complimentary serving of dog-safe ice cream and toppings during normal business hours at PetSmart stores with PetsHotel facilities while supplies last. The frozen treats are customarily offered as an add-on treat service at Doggie Day Camp and during overnight stays.

However you celebrate the day, stay cool!

Source: Forbes.com

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