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Weekend Insights: You Scream, We All Scream

July 18, 2021, 2:01 PM

July 18, 2021, is National Ice Cream Day. And yes, that’s a real thing.

National Ice Cream Day—and National Ice Cream Month—are “official” holidays designated by former President Ronald Reagan following a joint resolution from Congress.

The resolution, S.J.Res.298, was signed into law on July 2, 1984. It begins, “Whereas ice cream is a nutritious and wholesome food enjoyed by over 90 per centum of the people of the United States…" The resolution goes on to assert that “ice cream enjoys a reputation as the perfect dessert and snack food.”

Now, it’s the law(ish) that you should observe the day with “appropriate ceremonies and activities.” For most of us, that means eating a little ice cream.

Pedestrians at Coney’s Cones ice cream shop on Coney Island, Brooklyn, New York.
Photo credit: Gabby Jones/Bloomberg via Getty Images

Ice cream has long been popular in the United States. President George Washington loved it, budgeting approximately $200 for ice cream during the summer of 1790—adjusted for inflation, that rings in at over $6,000.

President Thomas Jefferson also enjoyed ice cream: His 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.

Today, freezers and transportation have made ice cream available not only to presidents, but to taxpayers like you and me. But how much you’ll pay for ice cream—including sales tax—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 Maryland, for example, it matters how much ice cream you want to buy: Ice cream, frozen yogurt, and frozen desserts that are sold in containers of less than one pint are taxable. And sales tax will apply to the sale of a single ice cream sandwich but will not apply to a package of a dozen ice cream sandwiches if they contain more than one pint of ice cream.

In Wisconsin, the mix-ins matter. In 2010, the state changed its sales tax laws to make clear that if you mix ice cream and one or more other food items to form an ice cream cake or ice cream bar, the result is taxable as a sale of prepared food. But if the ice cream cake or bar is prepared by someone other than the retailer, it is not taxable unless it meets one of the other prepared food definition categories.

And in Washington, how you eat your food may matter. Prepared foods are generally taxable, and specifically include foods sold with utensils. An exception applies if utensils are provided by the manufacturer and not the retailer, like yogurt or ice cream cups packaged with wooden or plastic spoons.

You get the point. When it comes to sales taxes, as with most tax laws, the details matter, and exceptions may apply. And while the complexity may not stop us from some behaviors—like buying ice cream—it can impact tax planning and compliance strategies. Fortunately, as always, we have you covered with the latest federal, state, and international tax analysis with our Insights Roundup.

Quick Numbers Trivia

According to International Dairy Foods Association (IDFA) Dairy Delivers®, the ice cream industry has a $13.1 billion impact on the U.S. economy, supports 28,800 direct jobs, and generates $1.8 billion in direct wages. Each American does their part by consuming how many pounds of ice cream and related frozen desserts each year?
(Answer at the bottom.)

Our Roundup

Tax laws don’t just vary from state to state, they can differ significantly depending on the country, industry, and type of tax. From accounting methods to multinational business tax allocations, here’s what our tax professionals are talking about this week.

A quick resolution to ongoing multinational tax issues might just be the cherry on top for some tax professionals this summer. But Jeff VanderWolk of Squire Patton Boggs isn’t so sure. In Pillar One’s Reallocation of Taxing Rights: Has Anyone Consulted the U.S. Trade Representative?, he discusses the proposed reallocation of taxing rights affecting certain large multinational businesses in light of the U.S. Trade Representative’s recent reports on digital services taxes.

The middle-market mergers and acquisitions space isn’t cooling off just yet. In Minimizing the Escrow: Preparing a Business For Sale, Christopher Hanewald and Josh Littlejohn of CBIZ highlight the importance of sell-side tax due diligence and how expanding complexity at the federal and state level—especially as a result of pandemic era legislation—can result in unanticipated liabilities causing a buyer to mandate escrows and earn-outs.

An ice cream cone to go at a Swensen’s Ice Cream shop in San Francisco.
Photo by David Paul Morris via Getty Images.

2020 was anything but plain vanilla in the tax world. The tumultuous past tax year, combined with tax increases expected in the future, make 2021 a critical year. In Accounting Methods Are Hot Topics for 2021 Tax Planning, Ryan Vaughan and Andrew Kosoy of Mazars outline common accounting methods and considerations for business taxpayers regarding such methods.

Special purpose acquisition company (SPAC) activity might be going soft in Canada. However, SPACs continue to offer opportunities for Canadian private business owners, writes Greg MacKenzie of Grant Thornton LLP (Canada) in Canadian Tax Considerations for SPACs.

Cross-border transactions selling goods and providing services by foreign suppliers to Vietnamese buyers are currently a hot topic. In Supplying Goods and Services into Vietnam: Tax Implications, Valerie Teo and Nguyen Tan Tai of Grant Thornton Vietnam discuss the tax implications and the possible application of double tax agreements in relation to the supply of goods and services to Vietnam.

A Dutch government proposal offers a twist, allowing interested parties the opportunity to respond to a draft bill. In Netherlands: Consultation On Legislation to Adjust Dutch Tax Qualification of Entities, Mark Theunissen and Martine Moor of Meijburg & Co., a member of the KPMG network, discuss the consultation on a proposal for a new Dutch tax qualification policy to align with international standards, and the numerous responses which have been submitted.

How sweet it is! A global corporate tax agreement that may bring an end to corporate tax havens appears to be within reach. However, if you are merely a human—and not a multinational enterprise—looking for a location to base your business, there are countries to which you can personally locate and enjoy both a low corporate tax rate and a high quality of life, writes Ken Boyd of AIS-CPA in Low Corporate Tax Countries With an Incredible Quality of Life.

An ice cream enthusiast in the sunshine of Brighton beach, Brighton, England.
Photo by Graeme Robertson via Getty Images.

And of course, we can’t talk about ice cream—at least in my house—without mentioning children. Children have been the focus of the tax world in the U.S. this week with the launch of the expanded child tax credit advance payments. In What You Need to Know About Advance Child Tax Credit Payments, you can find out more about the payments.

  • You can also listen in as House Ways and Means Committee member Suzan DelBene (D-Wash.) talks with Bloomberg reporter Kaustuv Basu about why Democrats pushed for the advanced payments and whether a permanent extension is possible on this week’s Talking Tax podcast.
  • And you can hear Elaine Maag, Principal Research Associate at the Brookings Institution Tax Policy Center, and Professor Francine Lipman of the Boyd School of Law, UNLV, discuss the mechanics and advantages of the advanced child tax credit payments on a recent episode of the Taxgirl Podcast.

Write for Us

Bloomberg Tax Insights articles are written by tax professionals offering expert analysis on current issues in tax practice and policy, tax trends and topics, and tax and accounting firm practice and management. If you have an interesting, never-published article for publication, we’d love to hear about it. You can contact our Insights team by emailing TaxInsights@bloombergindustry.com.

Spotlight

This week’s spotlight is on Katelynn Minott, COO, and a senior partner at Bright!Tax, and a leading specialist in taxes for Americans living overseas. Originally from Massachusetts, Minott is an expat herself, having moved to Chile in 2012, where she has helped thousands of other Americans around the world to become and remain compliant with their U.S. tax filing requirements.

Coming Up



Tax is increasingly global. But how do you navigate tax laws and international business etiquette at the same time? It’s important to understand professional customs, behavioral styles, and social customs as you build relationships and conduct business. Join us for a lively panel discussion on these issues as part of our Bloomberg Tax Insights Lunch and Learn series.

Leading off the discussion will be Terri Morrison, an author of ten books, including “Kiss, Bow, or Shake Hands®: The Bestselling Guide to Doing Business in More Than Sixty Countries.” Her books have sold over 475,000 copies and have been translated into multiple languages—from Mandarin and Russian to Korean and Estonian. Her latest book in the series, “Kiss, Bow or Shake Hands ® Courtrooms to Corporate Counsels,” is published by the American Bar Association, and is a #1 bestseller in the International Law Section.

Our panel will also include Nancy Stafford, the incoming chair of the International Law Section of the American Bar Association.

You can join us for this free virtual event, no registration required, by signing on here, July 28 at 12:00 pm EST.

Beyond Tax

Maybe it’s okay to stick to one flavor: Not every circumstance lends itself to variety. In Why New York Should Withdraw From the Uniform Bar Exam, retired judge Alan D. Scheinkman and Michael Miller, members of the NYSBA Task Force on the New York Bar Examination, write that the Uniform Bar Exam has been harmful to the preparation of New York state lawyers because it fails to test on New York-specific matters, leaving lawyers unprepared to represent clients in the state. As a result, they recommend New York come up with licensing alternatives.

Quick Numbers Answer

The average American consumes more than 22 pounds of ice cream and related frozen desserts per year.

According to IDFA, America’s top 10 favorite ice cream flavors are:

  1. Vanilla
  2. Chocolate
  3. Cookies N’ Cream
  4. Mint Chocolate Chip
  5. Chocolate Chip Cookie Dough
  6. Buttered Pecan
  7. Cookie Dough
  8. Strawberry
  9. Moose Tracks
  10. Neapolitan

You can find out what ice cream lovers in your state prefer here.

Exclusive Content for Bloomberg Tax Subscribers

State taxes of all kinds can vary, causing complications for taxpayers. In Biden’s Capital Gains Plan Triggers Inheritance Tax Concerns, Bloomberg Tax analyst Sarah Adkisson, who specializes in estate and gift tax issues, examines the impact of proposed federal changes and other concerns already tied to state inheritance taxes. Our Bloomberg Tax Industry Analysis: State Tax series examines how state-level regulations impact industry.
*Note: Your Bloomberg Tax login will be required to read the Bloomberg Tax Industry Analysis: State Tax series.

More Great Tax Content

This is a weekend roundup of Bloomberg Tax Insights, written by practitioners and featuring expert analysis on current issues in tax practice and policy. For a full archive of articles, browse by jurisdiction at Daily Tax Report, Daily Tax Report: State, Daily Tax Report: International, Transfer Pricing Report, and Financial Accounting.

You can also follow Bloomberg Tax on Twitter, Facebook, and LinkedIn.

What Did You Think?

We hope you found Weekend Insights valuable. We’d love to hear your suggestions for making it more enjoyable. Here’s our email: TaxInsights@bloombergindustry.com. Thank you for reading!

To contact the reporter on this story: Kelly Phillips Erb in Washington at kerb@bloombergindustry.com

To contact the editors responsible for this story: Rachael Daigle at rdaigle@bloombergindustry.com; Jeff Harrington at jharrington@bloombergindustry.com

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