(a) General. The sales tax is imposed on all meals sold by a restaurant or a restaurant part of a store.
1. A restaurant is any eating or drinking establishment that is primarily engaged in the business of selling meals for which a charge is made, including but not limited to: a cafe; lunch counter; private or social club; cocktail lounge and bar; hotel and motel dining room; catering business; tavern; diner; snack bar including theatre snack bar; dining room; coffee shop; vending machine which sells food items with a sales price of $3.50 or more; ice cream or other food product stand; canteen truck or wagon; street wagon or cart; salad bar; and any other establishment primarily engaged in the business of selling meals, whether stationary or mobile, temporary or permanent.
2. The following are not ordinarily considered restaurants: industrial commissaries which make no retail sales; vending machines which sell only food items with a sales price of less than $3.50; fraternities, sororities, and other student societies, with members residing at a common location and jointly sharing household expenses, including costs of preparing meals, and that prepare and serve meals to members; and bed and breakfast establishments or homes, as defined in M.G.L. c. 64G when the value of the breakfast is included in the rent.
(c) Store. A "store" is any establishment that is not primarily engaged in the business of selling meals. A "restaurant part" is an area, section, or counter, etc., within a store from which meals are sold. Examples of establishments that may be stores with a "restaurant part" include but are not limited to: bakeries, delicatessens, grocery stores, markets, or supermarkets.
(d) Meals. A meal is any food or beverage, or both, served or presented by a restaurant or restaurant part in a manner that is reasonably and commonly considered a meal. A meal 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.
(e) Tax free restaurant sales. Certain food and beverages are not considered meals when sold by a restaurant for off-premises consumption, and their sales are not subject to the sales tax. These include:
1. Food sold by weight, liquid or dry measure, count, or in unopened original containers or packages, including, but not limited to, meat products sold by the pound, a loaf of bread, a quart of milk, and a pint, quart, half gallon, etc. of ice cream, provided that such foods are commonly sold in the same manner in a retail food store which is not a restaurant.
2. Beverages in unopened, original containers or packages when sold as a unit with a capacity of at least twenty-six fluid ounces.
3. Bakery products when sold in units of six or more. Baked goods in units of six or more includes any variety of items totaling six or more servings, for example: two bagels, three muffins and one danish; or one whole pie, cake, loaf of bread, etc.
Prepared meals, snacks, sandwiches, food platters, poultry, fish or meat items, or other food combinations, to the extent that such items are sold by a restaurant whose principal business is the preparation or sale of such items in such form as to be available for immediate consumption without further significant preparation, whether for on or off premise consumption, are not to be excluded under clause 1., 2., or 3.
Example 1: Restaurant A sells all types of meals including desserts. Many of its desserts are kept in a cooler, available for take-out. Items in the cooler include: gallons, half gallons, quarts, and pints of ice cream; individual sundaes, ice cream sandwiches, and ice cream cake rolls. Nontaxable sales include: a pint, quart, half gallon, etc. of ice cream and the ice cream cake roll. Taxable sales include: an individual sundae and an ice cream sandwich. The sale of ice cream hand packed for the customer is taxable regardless of container size.
Example 2: Restaurant B sells all types of meals including pasta dishes. B sells quart jars of spaghetti sauce to customers for off-premises consumption. The sale of jars of sauce is not taxable unless sold heated.
Example 3: Restaurant C sells sandwiches, pizza, snack and family bags of chips, cans, and 1 liter and 2 liter containers of soda. The sale of sandwiches, pizza, snack bags of chips or cans of soda is taxable. The sale of a family bag of chips or 1 or 2 liters of soda for off premises consumption is not taxable.
Example 4: Restaurant D sells all types of meals including sandwiches. This restaurant sells meals for customers to consume on premises and also sells these meals for take-out from a counter. Specifically, customers may purchase from the counter the following items for take out: sandwich meats or cheeses; shrimp salad; pizza; soup; sandwiches; snack size bags of chips; cold soda cans; and whole cooked meat poultry or fish with or without the fixings.
Because the establishment is primarily in the business of selling meals it is a restaurant and most of its sales are taxable except those sales a restaurant may make tax free. A restaurant may not claim a store part. The counter is considered a convenience for take out meals and is not considered a delicatessen. Therefore, the rules for restaurant sales apply. See 830 CMR 64H.6.5(5)(e). In this example, the sale of sandwich meats or cheeses for off premises consumption is not taxable. The sale of the other items mentioned are taxable.
The rules are different for a delicatessen counter in a grocery store or a delicatessen store that is not primarily in the business of selling meals. For these businesses the rules in 830 CMR 64H.6.5(6)(b)3. apply.
Example 5: Restaurant E sells all types of meals. At the register is a display of candy and mints. The sale of individual snack size candy or mints by a restaurant is taxable. The sale of a multipack of candy bars or mints for off premises consumption is not taxable.
Example 6: Restaurant F sells all types of meals including pastries. Many of the pastries are kept in a cooler available for take-out. The sale of pastries by a restaurant in units of five or fewer are taxable. Its sales of pastries in units of six or more are not taxable.
1. Definition. Caterer, a person engaged in the business of preparing or serving meals, whether on the premises of the caterer, premises of the caterer's customers, or premises designated by the customers. A caterer is a restaurant.
2. Caterer does not own food. When a caterer prepares or serves food owned by a client, the caterer's charges for its service are not taxable. If the meals are sold to the client's customers or employees the amount charged to the customer or employee is subject to tax. Food may be purchased by the caterer and still owned by the client if the caterer acts as the client's agent and purchases food on the client's behalf.
3. Caterer owns food. When a caterer prepares or serves food it owns to a client's employees or customers, the amount charged the employees or customers is subject to tax. Any additional management fee or operating expense paid by the client to the caterer is not subject to tax. When a caterer prepares or serves food it owns to the client's employees for a charge paid by the client, rather than selling meals directly to the employees, the charge for the meals paid by the client is subject to tax. For rules regarding caterers acting through or on behalf of exempt organizations see 830 CMR 64H.6.5.(9)(a)4.
Example 1: The Whimsy Company provides low cost meals to its employees. Whimsy pays Quick Caterers to purchase the food and prepare and serve the meals to Whimsy's employees. Only the amount charged the employee for the meals is subject to tax. The additional operating expense paid by Whimsy to Quick is not subject to tax.
Example 2: The Whimsy Company provides free meals to its employees. Whimsy pays Quick Caterers to purchase the food and prepare and serve the meals. The food is owned by Quick. Quick is selling meals to Whimsy and these sales are subject to tax.
Example 3: The Whimsy Company provides free meals to its employees. Whimsy pays Quick Caterers to prepare and serve food owned by Whimsy. Since no sale of meals takes place, no taxable event occurs.
(g) Vending machines. A vending machine which sells food such as candy, snacks or sandwiches is generally not considered a restaurant and the sales are not taxable, providing that the vending machine only sells items with a sales price of less than $3.50 per item. If any single food item sold from a vending machine has a sales price of $3.50 or more, all sales from the vending machine are taxable.
(h) Industrial commissaries. An industrial commissary is not a restaurant if it prepares items only for sale to other vendors. However, if an industrial commissary prepares meals for retail sale, the industrial commissary is a restaurant with respect to its retail sales. The commissary must collect and pay over the sales tax on those sales.