Meals Tax

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.

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:

  • Cafeterias cafes
  • Carnivals movie theaters
  • Carry outs delicatessens
  • Caterers confectioneries
  • Coffee shops drug stores
  • Dining room eateries
  • Dinner theaters
  • Doughnut shops ice cream stores
  • Food concessions hotels
  • Gas stations bakeries
  • Grills bowling alleys
  • Motels grocery store delicatessens
  • Pushcarts lunch counters
  • Restaurants eating houses
  • Snack bars lunch wagons/lunch trucks

Meals Tax Examples

The following items are taxable:

  • Baked turkey prepared at restaurant or grocery store for off premises consumption
  • Beer/mixed drinks delivered to hotel/motel rooms or served in any restaurant
  • Beer/mixed drinks sold or served at any bar, lounge, tavern or restaurant
  • Cup of coffee
  • Doughnuts purchased from doughnut shop, convenience store, grocery store, etc. – not packaged/boxed
  • Food at a country club
  • Food sold at a for-profit cafeteria
  • Fountain drink from a fast food chain
  • Fried or barbecued chicken purchased at a grocery store deli
  • 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

Non-Taxable Items

The following items are non-taxable:

  • Chewing gum purchased at a restaurant
  • Church supper
  • Cold unopened drinks from case at convenience store
  • Cole slaw from delicatessen or restaurant
  • 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
  • Meal purchased by parent at elementary school
  • 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
  • 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.
  • Salads from delicatessen
  • Sandwich from vending machine
  • Unopened beer or wine purchases from off premises consumption
  • Unopened potato chips, corn chips, nabs, peanuts or other “snack foods”

Collections

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

Tips are not taxable unless:

  • 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
  • The seller keeps part or all of a tip