February 8, 2012

 

You request a letter ruling on behalf of *************************************** (“Supermarket”) regarding the applicability of the Massachusetts sales tax to sales of prepackaged individual salads sold in the produce or delicatessen area of Supermarket’s Massachusetts stores, where there is no seating available.   Additionally, you ask if it is determinative, for purposes of applicability of the sales tax, that some of the salads at issue are prepared in-store while others are prepared by third party vendors, or that some of the salads come with a fork and/or napkin and salad dressing inside the container while others do not.
 

Facts


Supermarket is a grocery store retailer doing business in Massachusetts.  The prepackaged individual salads at issue are prepared and packaged either in-store by Supermarket or off-premises by a third party vendor.  In either case, the salads at issue contain lettuce and/or other greens and various “fixings” depending upon the salad type (e.g., chicken Caesar, chef, cobb, Santa Fe with chicken, Asian salad, etc.).  Such fixings may include, among other food items,  chicken, ham, diced egg, roasted almonds, dried cranberries, and shredded cheese, and salad dressing.  In some cases, the salads contain a fork and/or napkin and dressing inside the container, which consists of a bowl or similar plastic vessel.  Although only some of the salads are labeled as “individual sized salad,” all of the salads at issue are intended principally for consumption by one individual.

The salads at issue are sold in the produce or delicatessen area of Supermarket’s stores, where there is no seating available and the expectation is that they will be consumed off the seller’s premises.  You have noted your understanding that salads sold from a designated café, food court, or other restaurant part of Supermarket’s stores are taxable, and that those salads are not at issue in this ruling.
 

Discussion


Under the Massachusetts General Laws, sales of food products for human consumption are exempt from sales tax. G.L. c. 64H, § 6(h).  “Food products,” as those words are used for purposes of the Massachusetts sales tax, include in relevant part vegetables and vegetable products, meat and meat products, eggs and egg products, fruit and fruit products, herbs, and spices, but do not include meals sold by restaurants.

By contrast to non-taxable food products, “meals” sold by restaurants are taxable.  Id.  A “meal” is defined as “any food or beverage, or both, prepared for human consumption and provided by a restaurant, where the food or beverages is [sic] 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.”  Id.  A “restaurant” is defined in relevant part as “any eating establishment where food, food products, or beverages are provided and for which a charge is made, including but not limited to, a cafe, lunch counter, . . .  snack bar, . . . vending machine, and any other place or establishment where food or beverages are provided, whether stationary or mobile, temporary or permanent; provided, however, that delicatessen, grocery, market or bakery stores shall not be considered eating establishments . . . except for any part of such a store which engages, in the sale of dinners, luncheons, . . . sandwiches, snacks, pizzas, and other similar items which are commonly sold at snack bars, coffee shops or luncheon counters. . . .”  Id.

The sales tax on a restaurant meal, whether consumed on or off the restaurant premises, is 6.25% of the price of the meal.[1]  G.L. c. 64H, §§ 2 and 6(h).  A grocery store, typically, is not classified as a “restaurant,” except for any part of such a store that sells hot and cold meals and beverages on an eat-in or to-go basis.  By engaging in the sale of these items, the grocery store qualifies, at least in part, as a restaurant and the items it sells in its restaurant part or parts are subject to the 6.25% tax.  Id.  See also the Sales Tax on Meals Regulation at 830 CMR 64H.6.5(6).

Under the Sales Tax on Meals Regulation, sales by a grocery store or delicatessen of “combination plates sold as a unit reasonably and commonly considered a meal whether or not heated,” are subject to the 6.25% tax.  830 CMR 64H.6.5(6)(a).  Additionally, under the Sales Tax on Meals Regulation, sales by a grocery store’s delicatessen of “[s]alads sold as a unit in a manner reasonably and commonly considered a meal such as on a plate or otherwise packaged as a meal are likewise subject to the 6.25% tax.  Id. at (6)(b)(3) and (4).   Given the addition of salad “fixings” to the lettuce and/or other greens in the salads at issue in this ruling, we conclude that such salads are properly treated as combination plates reasonably and commonly considered a taxable meal. 

In determining that the salads at issue constitute a “combination plate sold as a unit reasonably and commonly considered a meal,” i.e., a “meal” subject to the 6.25% tax, under both the General Laws and the Sales Tax on Meals Regulation, the following factors are determinative that such items would be classified as a taxable combination plate: (1) the salads are packaged in a quantity appropriate for consumption by one individual; (2) the salads contain various “fixings” or food items, such as meat, fish, chicken, cheese, eggs, nuts, fruit, vegetables, pasta, croutons, or salad dressing, that are combined, depending upon the salad type, with lettuce or other greens (as opposed to being limited to just different varieties of lettuce or other greens); and (3) the salads are packaged in a bowl or similar plastic container, not just in a cellophane bag, for ease of immediate consumption.  A fork and/or napkin may be included within the packaging, but the absence of utensils or napkins is not determinative.

The fact that the salads at issue may be sold in the produce or delicatessen areas of Supermarket’s stores, where there is no seating available and the expectation is that the salads will be consumed off the seller’s premises, does not affect their taxability.   The fact that the salads at issue are prepared and packaged either in-store by Supermarket or off-premises by a third party vendor likewise does not affect their taxability.  Under both the General Laws and the Sales Tax on Meals Regulation, combination plates, like the salads at issue, sold as a unit reasonably and commonly considered a meal are subject to the 6.25% tax regardless of where they are prepared and whether or not they are sold on an eat-in or to-go basis. G.L. c. 64H, §§ 2 and 6(h); 830 CMR 64H.6.5(6).
 

Ruling


Based on the discussion above, it is ruled that sales of the salads at issue are subject to the Massachusetts sales tax irrespective of the area of Supermarket’s stores the salads are sold from (which may include the produce or delicatessen areas), or whether or not the salads are sold on an eat-in or to-go basis.  The fact that the salads may be prepared and packaged either in-store by Supermarket or off-premises by a third party vendor and the fact that not all of the salads at issue may contain a fork and/or napkin inside the container are not determinative of taxability.  The determinative factors in concluding that the salads at issue here are taxable are, as discussed above, that (1) the salads are packaged in a quantity appropriate for consumption by one individual, (2) the salads contain combinations of  “fixings” or food items, and (3) the salads are packaged in a manner that provides ease of immediate consumption.

 

Very truly yours,

/s/Amy Pitter

Amy Pitter
Commissioner of Revenue

 

AP:MTF:ps

LR 12-2



[1] An additional 0.75% excise is imposed on meals sold in cities or towns that have adopted the ”local option meals excise.”  G.L. c. 64L.