When municipal revenue is involved, it matters if a hot dog is a sandwich.
Below, for many smiles and some “analysis,” Stephen Colbert has an answer:
In a New York State deli, if you order an uncut bagel and a side of cream cheese there is no tax. But if the cream cheese is on the bagel, it is a sandwich and subject to a tax.
Similarly, it might not be easy deciding if the hot dog is a sandwich. So let’s see if the NYS tax department definition tells us.
According to NYS:
A sandwich can be, “as simple as a buttered bagel or roll, or as elaborate as a six-foot, toasted submarine sandwich…”
And, it has to be assembled:
“When you go to the grocery store and buy a pound of bologna, a pound of cheese, and a loaf of bread, these items are not taxable. But when these items are made into and sold as a sandwich, they become a taxable food item, whether you eat the sandwich where you buy it or take it with you to eat somewhere else.”
If the burrito is a sandwich, is the taco? No. But, according to New York State, the hot dog is a sandwich.
The emcee of Nathan’s annual hot dog eating competition tells us “A hot dog is not a sandwich because a hot dog is a hot dog.” Furthermore, last July the Louisville Courier Journal issued a correction that said it should not have called the hot dog a sandwich.
Our Bottom Line: Tax Vocabulary
As economists, we should note that taxes are about more than the money government collects. Ranging from capital to candy, taxable items get definitions that create incentives, shape our behavior and influence our vocabulary.
So, to save money in New York, we can just buy some bologna, cheese, and bread.
My sources and more: When this NYC tax website explains why a bagel and the hot dog are taxable, it is riveting (really). Then, if you would like further analysis, do look at this NY Daily News article and Mental Floss (where they explain why the burrito is not a sandwich in Massachusetts). Finally, for some fun, Gothamist had more to say about the absurdity of NYS sandwich taxes.