PS 95(3)

Sales and Use Taxes on Meals

This publication has been superseded by PS 99(1) and modified by SN 97(3)

PURPOSE: In November, 1990, the Department issued a revision of Bulletin 17, Taxability of Meals. Since then, certain changes in the manner in which food items and meals are sold have rendered portions of Bulletin 17 ambiguous or incorrect. This Policy Statement describes the Department's current policy on the taxability of the sale of meals, food products for human consumption and bulk sales of food, and contains a definition and description of bulk sales of food which differs from that of Bulletin 17. The Policy Statement describes which food sales and products constitute taxable meals and which retail establishments qualify as establishments at which meals are sold. The Policy Statement describes which retail establishments qualify as supermarkets and provides special rules relating to sales by supermarkets.

BACKGROUND: Conn. Gen. Stat. §12-407(2)(a) includes, in the definition of sale and selling subject to sales and use taxes, "[a]ny transfer of title ... of tangible personal property for a consideration," including food items. Conn. Gen. Stat. §12-407(2)(e) also includes in the definition of sale and selling "the furnishing, preparing, or serving for a consideration of food, meals or drinks." Conn. Gen. Stat. §12-412(13) exempts from sales and use taxes sales of food products for human consumption. That subsection defines food products and also specifies that the exemption does not apply to "meals sold by an eating establishment or caterer." The subsection further defines meal and eating establishment. Other subsections of Conn. Gen. Stat. §12-412 exempt from sales and use taxes sales of meals and food products by and to certain persons, as described herein.

STATUTORY AND REGULATORY AUTHORITY: Conn. Gen. Stat. §12-407(2)(e); Conn. Gen. Stat. §12-412(5), (9), (13), (26), (35), (46) and (57); Conn. Gen. Stat. §12-412e; Conn. Agencies Regs. §12-426-29.

TAXABILITY OF MEALS: Sales of all meals regardless of cost are subject to sales and use taxes. (Prior to July 1, 1989, sales of meals under $2.00 were exempt.) Meals include all food and beverages sold for human consumption at the seller's location. Meals also include food products ordinarily sold in such form and portions that they are ready for immediate consumption at or near the location of the seller, including prepared foods, prepackaged foods, hot foods and foods heated on the premises for the purchaser. A meal may be a full dinner or it may be a single item. Meals are subject to sales and use taxes whether they are served at the location of the seller, delivered to the purchaser's location or sold on a "take out" basis.

SELLERS OF MEALS: Retail establishments in which taxable meals are sold include, but are not limited to:

• Cafeterias
• Caterers
• Cocktail lounges
• Coffee or donut shops
• Convenience stores
• Delicatessens
• Diners
• Drive-ins
• Fast food outlets
• Grinder shops
• Hot dog carts
• Hotels or boarding houses
• Ice cream trucks
• Mobile canteens
• Pizzerias
• Private or social clubs
• Refreshment stands
• Restaurants
• Sandwich shops
• Snack bars
• Street vendors
• Taverns
• Vending machines

BULK SALES OF FOOD: The sale of food items in bulk is not generally considered the sale of meals. Exempt bulk food items are those items sold in quantities, forms or portions which are larger than those that are ordinarily considered to be for immediate consumption, or larger than those that are ordinarily sold by eating establishments for immediate consumption. For example, whole loaves of bread and whole cakes and pies are considered bulk food items and are therefore not subject to sales and use taxes. However, whole cooked chickens and whole racks of ribs, when sold by eating establishments or caterers, are considered food items for immediate consumption, and are subject to sales and use taxes.

TAXABLE MEALS: Examples of food for immediate consumption constituting taxable meals include, but are not limited to, the following:

• Coffee or tea (ready to consume, hot or iced)
• Sandwiches and grinders
• Popsicles, ice cream cones, cups, sundaes and other individual servings of frozen desserts unless sold in factory prepackaged multi-unit packs
• Ice cream, frozen yogurt and other frozen desserts sold in containers of less than one pint
• Yogurt sold in containers of 8 ounces or less unless sold in factory prepackaged multi-unit packs
• Fountain drinks, shakes and syrup-flavored crushed ice drinks
• Bottled or canned fruit juices and drinks, containers of milk and non-carbonated mineral or spring water sold in containers of 16 fluid ounces or less unless sold in prepackaged multi-unit packs
• Salads sold at salad bars
• Salads sold in containers of less than 8 ounces
• Donuts, muffins, rolls, bagels and pastries (5 or fewer)
• Cookies (5 or fewer or sold by weight of less than 8 ounces)
• Pies or cakes by the slice
• Bags or packages of 5 ounces or less of chips, popcorn, nuts, trail mix, crackers, cookies, snack cakes or other snack foods
• Single pieces of fruit
• Pizza, whole or sliced
• Cooked chicken sold by the piece including "buckets" of chicken and whole cooked chickens
• Ribs sold by the piece or portion and whole racks of ribs
• Items such as salads, side dishes and rolls, when sold as part of "family pack" meals including, typically, whole chickens or buckets of chicken, even when such items exceed the weight or quantity limits specified above.
• Items sold in quantities or portions larger than those specifically noted above are considered to be bulk sales of food and, therefore, are not generally considered to be taxable meals.

NOTE: The above distinctions between meals and bulk food apply to sales by eating establishments and caterers and do not apply to sales by supermarkets. See below for special rules for sales by supermarkets.

SUPERMARKETS: A supermarket means any store commonly known as a supermarket or grocery store (excluding any store commonly known as a convenience store) which is primarily engaged in the retail sale of a wide variety of food products and which contains, at a minimum, the following sections or departments: dairy; delicatessen; condiments; bread and baked goods; canned and dry goods; frozen foods; fresh, smoked and prepared meats; poultry; fresh fruits and vegetables; household supplies; and paper goods. A specialty store that is primarily engaged in the retail sale of one variety of food product such as seafood, produce, candy, dairy, bakery products, meats or delicatessen, is not included in the definition of supermarket.

Supermarkets are not generally considered to be sellers of meals. The rules describing the difference between bulk sales of food and sales of meals set forth above in this Policy Statement do not apply to food items sold in supermarkets. The items listed above as taxable meals are not taxable when sold in supermarkets, except as noted below.

The following sales are considered to be sales of meals by a supermarket and are subject to sales and use taxes:

• Catering services performed by a supermarket;
• Sales of meals in areas of a supermarket where food is intended to be consumed in the supermarket, such as at snack bars, even if the meals sold in these areas are taken off the premises by the purchaser;
• On or after September 1, 1990, sales of sandwiches, grinders, coffee or tea prepared in a supermarket at a delicatessen counter or elsewhere for takeout.

CATERING SERVICES: Catering means preparing meals and either serving such meals on premises designated by the customer, or delivering, but not serving, such meals to premises designated by the customer; Conn. Agencies Regs. §12-426-29(c)(3). Supermarkets as well as eating establishments may perform catering services. However, if a supermarket prepares platters of food (other than sandwiches, grinders, coffee or tea) at a delicatessen counter or elsewhere for takeout, but does not deliver the items, it is not providing catering services, and such items are not taxable.

EXEMPT SALES OF MEALS AND FOOD ITEMS: The following are among the circumstances under which sales of meals and food items are exempt from sales and use taxes:

• Sales of tangible personal property (including meals and food items) to or by nonprofit charitable hospitals in this state, nonprofit nursing homes, nonprofit rest homes and nonprofit homes for the aged for the exclusive purposes of such institutions; Conn. Gen. Stat. §12-412(5);
• Sales of meals and food items to patients in hospitals, homes for the aged, convalescent homes, nursing homes and rest homes; Conn. Gen. Stat. §12-412(9);
• Sales of meals and food items in a student cafeteria, dining hall, dormitory, fraternity or sorority maintained in a private, public or parochial school, college or university, when sold to students and staff of such institutions; Conn. Gen. Stat. §12-412(9);
• Sales of items (including meals and food items such as cookies and snack foods as well as non-food items such as candy bars) for not more than $20 each by Connecticut eleemosynary organization for the purposes of youth activities, and by accredited elementary and secondary schools for school purposes; Conn. Gen. Stat. §12-412(26);
• Sales of tangible personal property (including meals and food items) to any center of service for elderly persons as described in Conn. Gen. Stat. §17b-425; Conn. Gen. Stat. §12-412(35);
• Sales of meals made by a nonprofit organization to an elderly, disabled or other homebound person if the meal is delivered to the home of such person; Conn. Gen. Stat. §12-412(46) and Conn. Agencies Regs. §12-426-29(d)(4);
• Sales of items purchased with federal food stamps; Conn. Gen. Stat. §12-412(57) and §12-412e.

NON-FOOD ITEMS: Alcoholic beverages, nonalcoholic beer and wine, carbonated beverages, candy and gum are not food items and are subject to sales and use taxes (unless purchased as eligible items with federal food stamps).

EFFECTIVE DATE: Effective for all open tax periods, except that to the extent the information contained in this Policy Statement differs from the information contained in Bulletin 17 with respect to bulk sales of food, all retailers are to be in full compliance with this Policy Statement by no later than October 1, 1995.

EFFECT ON OTHER DOCUMENTS: Bulletin 17 is superseded by this Policy Statement. In addition, any correspondence from the Department which is not in accord with this Policy Statement may no longer be relied upon.

EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current Department policy or practice affecting the liability of taxpayers. Unlike a Ruling, a Policy Statement does not apply a policy or practice to a specific set of facts, but it may be referred to for general guidance by taxpayers. Unlike a Special Notice, it does not announce a new policy or practice in response to changes in state or federal laws or regulations or to judicial decisions. 

PS 95(3)
Sales and use taxes
Issued: 7/27/95