New York City, NY

Philadelphia Cream Cheese Takes on NY Bagel Tax

Darshak Rana
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New York City is famous for its delicious bagels and residents' unwavering opinions on where to find the finest ones. A common grievance among New Yorkers is the state's bagel tax, which adds an extra eight cents to the price of every bagel, regardless of how it is served.

Philadelphia Cream Cheese is now stepping into the spotlight, offering New Yorkers an opportunity to defy this tax.

Kraft Heinz, the parent company, recently announced a collaboration with the well-known H&H Bagels for a unique Tax Day promotion. The Tax-Free Bagel may appear to be a regular, unsliced bagel, but it actually contains a hidden filling of cream cheese.

The company asserts that by selling the bagel whole, it can circumvent the eight-cent tax, providing customers with a clever way to enjoy their bagels without paying extra.

Interestingly, not all bagels in New York are subject to taxation.

According to New York Times, the tax is only applicable to bagels intended for immediate consumption, such as those served on the premises or prepared to be eaten right away. Whole bagels, on the other hand, are viewed as being for home consumption and are therefore not taxed.

This distinction has caught some establishments off guard, such as Bruegger's Bagels, which faced penalties after their New York branches were audited in 2010 for not collecting the tax.

Philadelphia Cream Cheese and H&H Bagels maintain that their Tax-Free Bagels avoid the bagel tax because they are unsliced, with the cream cheese filling concealed within.

However, New York state's definition of taxable food as "prepared by the seller and ready to be eaten" may still apply to these bagels, meaning the companies might have only sidestepped the tax regulation in spirit rather than in practice.

Despite the potential legal ambiguity, the promotion is expected to be popular among customers, providing them a temporary act of defiance by saving eight cents. The promotion will run from April 14 through Tax Day on April 18. The Tax-Free Bagels will be available at H&H Bagel stores in Manhattan, where customers can purchase them in person. Additionally, those outside the city or unable to visit a store can order the bagels through H&H Bagels' website for nationwide delivery.

This creative collaboration between Philadelphia Cream Cheese and H&H Bagels brings attention to the controversial bagel tax while offering New Yorkers a way to enjoy their favorite breakfast staple without paying the extra fee, even if only for a few days.

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