“New York City may be the bagel capital of the world, but its residents incur a ludicrous ‘bagel tax’ each time they opt to purchase a bagel that’s sliced and schmeared with cream cheese,” the companies said in a release. That’s true, sort of. New York doesn’t have a specific bagel tax, explained Ryan Cleveland, a representative of the New York State Department of Taxation and Finance. But certain food products, including baked goods, are tax exempt, while prepared foods are not. “It’s when a bagel becomes a sandwich or a prepared food that it then becomes taxable,” he said. In New York City, food sold at restaurants is taxed at 8.875%. Philadelphia and H&H plan to skirt this rule with the stuffed bagel, which is available at H&H’s Manhattan locations for $1.90 each, from Friday through Tax Day on Tuesday, April 18; and also online.

Featured in CNN.com Business: The cream-cheese-stuffed bagel is here

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In the 1990s, Pizza Hut unveiled an important cheese-in-bread innovation, the stuffed crust pizza. Now, Philadelphia cream cheese and H&H Bagels, a New York City-based bagel shop, are trying to please the carbohydrate- and dairy-loving communities with a new and dubious spin on the stuffed crust: The bagel stuffed with cream cheese.

But unlike stuffed-crust pizzas, the bagel is filled with cheese after it is baked, making it more of a cream cheese bagel donut, if not in spirit then at least in form.

The bagels are “baked fresh daily and then cooled to be individually stuffed with Philly’s signature cream cheese one at a time,” according to Jay Rushin, CEO of H&H. “H&H Bagels use a pastry tool to pipe in the Philly cream cheese by hand,” he added. “The process leaves very small holes where the insertions are made, similar to a jelly donut.”

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