New Jersey Tax Court Invalidates Regulation Taxing Bakery Items as Prepared Food

Short summary

The New Jersey Tax Court struck down a state tax regulation that treated bakery items like donuts and bagels as taxable prepared food based on a 75-percent sales threshold and utensil availability. The court found the regulation contradicted the enabling statute, which exempts bakery items sold without utensils. The ruling reinforces that administrative regulations cannot override statutory language or create new tax classifications beyond legislative intent.

• •New Jersey Tax Court invalidates regulation taxing donuts and bagels as prepared food
• •Regulation's 75-percent sales threshold for utensil provision contradicted statutory exemption for bakery items
• •Court rules administrative bodies cannot rewrite tax law or create new tax classifications

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