I went back to Starbucks this morning, despite my claims to the contrary. I had gone the other day just to break a $20 and found that the grande coffee was back below $2.00. This morning, I just couldn’t bear the thought of the awful office coffee (black, because the only thing worse than bad coffee is powdered creamer). And they weren’t busy, so I asked the guy who served me about the price change.
He very nicely explained what happened, and it’s actually an interesting explanation. Starbucks did, in fact, raise prices back in July. That pushed the price over $2. But then Virginia changed the tax laws. They stopped taxing plain coffee. They still tax the coffee-like milkshakes, and they tax the food that Starbucks serves. According to the guy, they will even tax your coffee if you get it with a pastry or something. I think the distinction is between “coffee” and “food”, and coffee is considered to be part of the “food” category if you drink it with something to eat.
Anyway, very interesting.