May 10, 1984

You request a ruling as to the application of the sales tax to the sales of food by __________ ("Restaurant").

The Restaurant sells meals to customers and also runs a pasta shop from which it sells uncooked pasta, sauce, packaged candy, and packaged cookies.

Chapter 64H, Section 6(h) of the Massachusetts General Laws exempts from the sales tax sales of food products for human consumption. But the term "food products" does not include "meals," defined as

"any food or beverage, or both, prepared for human consumption and provided by a restaurant, where the food or beverages are intended for consumption on or off the restaurant premises, and includes food or beverages sold on a 'take out' or 'to go' basis, whether or not they are packaged or wrapped and whether or not they are taken from the premises of the restaurant."

Certain food products sold by a restaurant are deemed not to be meals, if such products are not sold in "such form as to be available for immediate consumption." (G.L. c. 64H, § 6(h)). Such food products include:

"[f]ood sold by weight, liquid or dry measure, count, or in unopened original containers or packages, including, but not limited to, meat, bread, milk, specialty foods, cream and ice cream; provided, that such foods are commonly sold in such manner in a retail food store which is not a restaurant;...bakery products including but not limited to doughnuts, muffins, bagels, and similar items sold in units of six or more." (G.L. c. 64H, § 6(h)).

If a business conducts two or more separate and distinct activities at the same location, each activity may be treated as a separate business for the purpose of determining which activities are subject to the sales tax. But the business's books and accounting records should accurately reflect the gross receipts from each activity. Estimates are not acceptable.

Based on the foregoing, it is ruled that:

1. Sales of meals by the Restaurant are subject to the sales tax.

2. Sales of uncooked pasta, packaged candy, and packaged cookies, if sold by weight, liquid or dry measure, count, or in unopened original containers and provided that they are commonly sold in such manner in retail food stores which are not restaurants, are exempt from the sales tax.

3. Sales of sauce by the Restaurant are subject to the sales tax, unless the sauce is sold in the same manner as it is commonly sold in a retail food store and unless the sauce is sold in a form as to be not available for immediate consumption without further significant preparation.

Very truly yours,

/s/Ira A. Jackson

Commissioner of Revenue

IAJ:JES:mf

LR 84-28