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Missouri Supreme Court: no tax loophole for doughnut holes

May 3, 2016 at 3:39 p.m. | Updated January 1, 2021 at 12:00 a.m.

JEFFERSON CITY, Mo. (AP) -- Missouri Supreme Court judges have ruled against what some called a tax loophole for doughnut holes.

The high court unanimously ruled Tuesday that the Krispy Kreme doughnut maker doesn't qualify for a lower sales tax typically applied to grocery stores.

Groceries are taxed at 1 percent, while food at restaurants or otherwise made to be immediately eaten is taxed at 4 percent.

Krispy Kreme from 2003-2005 paid the 4 percent tax, but later tried to get a refund for doughnut sales. The company argued the doughnuts should be taxed at 1 percent because it said customers don't always eat them immediately after purchasing them at Krispy Kreme shops.

Judges said that would allow a tax loophole for the doughnut-hole maker that wasn't intended by lawmakers who created tax policies.

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