PS 99(1)

Sales and Use Taxes on Meals

This publication has been superseded by PS 2002(2)

Purpose

This Policy Statement describes the Department’s current policy on the taxability of meals and food products for human consumption and contains a definition and description of bulk sales of food. The Policy Statement describes which food sales and products constitute taxable meals, which retail establishments qualify as establishments at which meals are sold and which retail establishments qualify as supermarkets. Special rules are provided relating to sales by supermarkets. The Policy Statement also provides information about food products sold through coin-operated vending machines, gives examples of taxable meals sold in supermarkets and discusses resale issues for sellers of meals.

Effective Date

Effective upon issuance and applicable to all open tax periods, except that the exemption for food products sold in vending machines is effective July 1, 1997.

Background

Conn. Gen. Stat. §12-407(2)(a) includes, in the definition of sale and selling subject to sales and use taxes, "[any 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), as amended by 1998 Conn. Pub. Acts 262, §6, exempts from sales and use taxes the sale 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.

Vending machines are excluded from the definition of eating establishments. Conn. Gen. Stat. §12-412(27)(B) exempts sales of food products in coin-operated vending machines, effective July 1, 1997. The sale of meals and food products by and to certain persons is exempted from sales and use taxes by other subsections of Conn. Gen. Stat. §12-412. See Page 4 for more information.

Statutory and Regulatory Authority

Conn. Gen. Stat. §12-407(2)(e); Conn. Gen. Stat. §12-412(5), (9), (13), (14), (26), (27), (35), (46), (57) and (94); Conn. Gen. Stat. §12-412e; Conn. Agencies Regs. §12-426-29.

Taxability of Meals

The sale of all meals, regardless of cost, is subject to sales and use taxes. 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 are ready for immediate consumption at or near the location of the seller. This includes 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 that sell taxable meals include, but are not limited to:

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 larger than those ordinarily considered to be for immediate consumption or larger than those 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 therefore are not subject to sales and use taxes. However, whole cooked chickens, whole racks of ribs or trays of pasta, when sold by eating establishments or caterers, are considered food items for immediate consumption and are subject to sales and use taxes.

Taxable Meals

Food for immediate consumption constituting taxable meals includes, but is 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 by the slice
• 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. Therefore, they are not generally considered to be taxable meals.

The distinctions between meals and bulk food apply to sales by eating establishments and caterers, but do not apply to sales by supermarkets or sales of food products in coin-operated vending machines. See SN 97(3), Sales and Use Tax Exemption for Food Sold Through Coin-Operated Vending Machines, for information about food products sold through coin-operated vending machines. See below for special rules for sales by supermarkets.

Special Rules for Supermarkets

A supermarket means any store commonly known as a supermarket or grocery store (excluding any store commonly known as a convenience store). A supermarket is primarily engaged in the retail sale of a wide variety of food products and 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 items, 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 are considered sales of meals by a supermarket and are subject to sales and use taxes:

• catering services performed by a supermarket;
• sales of sandwiches, grinders, coffee or tea prepared in a supermarket at a delicatessen counter or elsewhere for takeout. The sales of these items sold anywhere in a supermarket are taxable;
• sales of meals in areas of a supermarket where food is intended to be consumed in the supermarket, such as at snack bars or food courts. The meals sold in these designated eating areas are taxable even if taken off the premises by the purchaser.

Example 1: A customer purchases a meal in the snack bar area of a supermarket and pays for it at the snack bar area. This transaction is taxable because the sale occurred in the area designated for eating.

Example 2: A customer purchases and pays for a meal at the snack bar of a supermarket and does not eat it at the designated eating area but takes it home. This transaction is taxable because the sale occurred in the area designated for eating.

Example 3: A customer sits in an area designated for eating and while at the table, gives a supermarket employee money for a pizza, whole cooked chicken, or salad. This transaction is taxable because the meal was purchased in the area designated for eating.

Example 4: A customer purchases a meal in the checkout line of a supermarket then consumes the meal in a designated eating area. This transaction is nontaxable (except if it is the sale of a sandwich, grinder, coffee or tea) because the meal was not purchased in the area designated for eating.

Catering Services

Meals provided by catering services are taxable. 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. Such persons are caterers, even if they only serve the meals and do not provide the food products which will constitute the meals; Conn. Agencies Regs. §12-426-29(c)(3).

Taxable catering services also include the preparation of trays, pans or platters of food even if they are not delivered or not served by the caterer.

Supermarkets, as well as eating establishments, may perform taxable 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.

Resale Issues for Sellers of Meals

According to Conn. Agencies Regs. §12-426-29(f) "an eating establishment or caterer which furnishes, with meals, paper napkins, paper plates, plastic tableware, straws and similar non-reusable items may purchase such items without payment of sales tax" by issuing a resale certificate to the supplier. Examples of other non-reusable items that sellers of meals may purchase for resale include paper, plastic or styrofoam cups, plates and bowls, plastic cup lids, toothpicks and stirrers.

Eating establishments or caterers may also purchase paper, plastic or styrofoam boxes, paper bags, and other nonreturnable containers used to hold meals tax exempt under Conn. Gen. Stat. §12-412(14) by using a resale certificate.

Sellers of meals may only purchase flowers for resale if they are chosen by the customer and are kept by the customer at the end of the meal.

Caterers or eating establishments are the final consumer of most other items that they purchase or lease for use in furnishing meals and must pay sales and use taxes on these purchases or leases. Examples of items that sellers of meals use or consume in providing meals include linens, table cloths, chairs, tables, china, silverware, food warmers, chafing dishes, tents and cooking equipment.

Exempt Sales of Meals and Food Items

Circumstances under which sales of meals and food items are exempt from sales and use taxes include:

• sales of tangible personal property (including meals and food items) to or by nonprofit charitable hospitals, nonprofit nursing homes, nonprofit rest homes and nonprofit homes for the aged in this state for the exclusive purposes of the institutions; Conn. Gen. Stat. §12-412(5);
• sales of meals and food items served or sold on the premises 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 the 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 organizations 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;
• sales of food products through coin-operated vending machines. Conn. Gen. Stat. §12-412(27)(B). (Sales of candy, confectionery, gum, soda and all other carbonated beverages and alcoholic beverages sold through coin-operated vending machines remain taxable.) See SN 97(3), Sales and Use Tax Exemption for Food Sold Through Coin-Operated Vending Machines, for more details.
• sales of tangible personal property (including meals and food items) at up to five one-day events during a calendar year, such as bazaars, fairs, picnics or tag sales, by a nonprofit organization; Conn. Gen. Stat. §12-412(94). See SN 98(11), Exemption from Sales and Use Taxes of Sales by Nonprofit Organizations at Fundraising or Social Events, for more details.

Non-Food Items

Alcoholic beverages; all carbonated beverages, including water, soda, nonalcoholic beer and carbonated nonalcoholic wine; candy and gum are not food items and are subject to sales and use taxes (unless purchased as eligible items with federal food stamps).

Effect on Other Documents

This Policy Statement supersedes PS 95(3), Sales and Use Taxes on Meals, and modifies SN 97(3), Sales and Use Tax Exemption for Food Sold Through Coin-Operated Vending Machines. In addition, do not rely on any correspondence from the Department that is not in accord with this Policy Statement.

Effect Of This Document

A Policy Statement is a document that explains in depth a current Department position, policy or practice affecting the tax liability of taxpayers. 

PS 99(1)
Sales and use taxes
Issued: 3/16/99