Effective May 19, 1992, a tax has been levied on the purchaser of all prepared food and beverages served in and from the following places of business:
Restaurants eating houses
Dining room eateries
Grills bowling alleys
Coffee shops drug stores
Snack bars lunch wagons/lunch trucks
Pushcarts lunch counters
Carry outs delicatessens
Gas stations bakeries
Food concessions hotels
Motels grocery store delicatessens
Doughnut shops ice cream stores
Carnivals movie theaters
All prepared food and beverages are taxable whether intended to be consumed on the seller’s premises or not. The rate of tax is 4% of the gross amount paid for the food and beverages. For the purpose of this tax, food is defined as:
Any and all edible refreshments or nourishment, liquid or otherwise including alcoholic beverages, purchased in or from a restaurant or from a caterer, except snack foods.
Please refer to the exemptions section for details on the purchase of foods that are exempted from this tax.
Meals Tax Examples Of, But Not Limited to Taxable Items
Baked turkey prepared at restaurant or grocery store for off premises consumption
Beer/mixed drinks sold or served at any bar, lounge, tavern or restaurant
Beer/mixed drinks delivered to hotel/motel rooms or served in any restaurant
Cup of coffee
Food at a country club
Fountain drink from a fast food chain
Fried or barbecued chicken purchased at a grocery store deli
Food sold at a for-profit cafeteria
Hot dog from a convenience store
Hot dog from a push cart
Ice cream cone, sundae and the like sold at an ice cream shop
Party tray from a delicatessen
Sandwich from case at service station/convenience store
Sandwich from lunch truck
Doughnuts purchased from doughnut shop, convenience store, grocery store, etc. – not packaged/boxed
Meals Tax Examples Of, But Not Limited To Non-Taxable Items
Chewing gum purchased at a restaurant
Cold unopened drinks from case at convenience store
Food provided to patient in hospital or nursing home
Food purchased as part of rescue squad or church fund-raising effort
Frozen TV dinner or like grocery items purchased in grocery store
Lunch meat and loaf of bread from a deli in a grocery store
Peanut or other nuts from a deli in a grocery store
Peanut or other nuts from a peanut or candy shop
Popcorn, candy, and other “snack foods” purchased at movie theater
Unopened potato chips, corn chips, nabs, peanuts or other “snack foods”
Meal purchased by parent at elementary school
Prepackaged box of doughnuts purchased at grocery store or boxed doughnuts at doughnut shop
Quantity of packaged ice cream purchased at either a grocery store or ice cream store (quart, pint, etc.) Not meant to be consumed at one time.
Cole slaw from delicatessen or restaurant
Sandwich from vending machine
Salads from delicatessen
Unopened beer or wine purchases from off premises consumption
Who Will Collect the Prepared Food and Beverage Tax?
All of the businesses that come under the definition of restaurant or caterer and that are partially listed on page one must collect this tax from their customers when the charge for the food and beverages is paid. The tax is to be collected whether the customer pays in cash or by credit card. The seller adds the tax to the gross amount and collects the total from the customer.
Sellers must not in any way suggest or indicate that they will relieve the customer of payment of part or all of this tax. The customer alone must pay the total tax amount due.
Tips are not taxable unless:
The seller keeps part or all of a tip.
The seller adds a specific amount or percentage to the gross price of the food and requires the customer to pay this amount only to the extent that the mandatory gratuity or service charge does not exceed 20% of the sales price.