No free lunch: Burger King owes more taxes to Arkansas

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LITTLE ROCK, Ark. (AP) — The Arkansas Supreme Court says a restaurant chain that provides free hamburgers and other meals to its managers must pay taxes on them as though they were sold to the public.

Flis Enterprises was paying taxes on the meals at the wholesale cost, which is lower. After the Arkansas Department of Finance and Administration said the chain of Burger King restaurants owed another $33,000 in taxes, Burger King took its beef to the state Supreme Court.

In a ruling Thursday, the justices said the higher rate should apply.

In arguments last month, the restaurant chain said since the food is never offered to the public, the retail cost never applies. The state says changing raw ingredients makes a new product with a higher value, so the taxes must be higher.

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