Current through Register 1531, September 27, 2024
(1)
General, Outline.
(a)
General. The
Massachusetts sales tax is imposed on sales of meals by a restaurant. The tax
is levied on the sales price of the meal. The sale of food products for human
consumption is exempt from the sales tax.
(b)
Outline. 830 CMR
64H.6.5(1)(b) lists the sections contained in 830 CMR 64H.6.5.
1. General, Outline.
2. Definitions.
3. Nontaxable Sales.
4. Food Products.
5. Restaurant Meals.
6. Store Sales.
7. Sales Price.
8. Nonreturnable Containers, Purchases by
Vendors.
9. Sales of Meals Exempt
when Sold to Certain Organizations.
10. Special Rules for Fundraising
Activities.
11. Exempt
Organizations - Sales of Meals in the Regular Course of Business.
12. Special Substantiation
Requirements.
13. Sales of Meals
Exempt when Sold by Certain Other Institutions and Organizations.
14. Food Stamps.
15. Liquor License Holder.
16. Recordkeeping.
(2)
Definitions. The definitions included in various
sections, subsections, divisions, or subdivisions of 830 CMR 64H.6.5, apply
where appropriate throughout the regulation.
Commissioner, the Commissioner of
Revenue or the Commissioner's duly authorized representative.
Vendor, as defined in M.G.L. c. 64H,
§ 1.
(3)
Nontaxable Sales. If an establishment has taxable and
nontaxable sales, it must comply with the record keeping requirements in 830
CMR 64H.6.5(16). If a vendor's records do not substantiate nontaxable sales,
all sales will be considered taxable.
(4)
Food Products.
The sale of food products for human consumption is exempt from the sales tax
unless the food products are prepared for human consumption and provided by a
restaurant. The term "food products" includes but is not limited to:
Cereals and cereal products;
Flour and flour products;
Milk and milk products, including ice cream;
Oleomargarine;
Meat and meat products;
Fish and fish products;
Eggs and egg products;
Vegetables and vegetable products;
Fruit and fruit products;
Soft drinks;
Herbs and spices;
Salt;
Sugar and sugar products;
Candy and confectionery;
Coffee and coffee substitutes;
Tea;
Cocoa and cocoa products;
Food substitutes;
Ice when used for household consumption; and
Water.
The term "food products" does not include: Alcoholic beverages
which contain 1/2 of 1% or more of alcohol by volume at 60° F; Dietary
supplements and adjuncts; and Medicines, tonics, and preparations in liquid,
powder, granular, tablet, capsule, lozenge, and pill form sold as dietary
supplements or adjuncts. Medicines prescribed by a registered physician are
exempt from sales tax. M.G.L. c. 64H, § 6(1).
(a)
Definitions.
1.
Candy. Food
products with a sugar or confection base, including breath fresheners, gum,
mints, and health foods which consist primarily of sugars, but excluding
dietary supplements and adjuncts.
2.
Dietary supplements or
adjuncts. Sales of dietary supplements or adjuncts are subject to
sales tax. Dietary supplements or adjuncts include items such as alfalfa
tablets, vitamins and minerals, herb laxative tablets, lecithin capsules,
chewable lecithin tablets, powdered proteins, fiber wafers, aloe vera juice,
baking enricher, and brewer's yeast.
3.
Ice. Ice sold for
uses other than household consumption is subject to tax. The sale of ice to
restaurants and bars for use exclusively as crushed ice in drinks is a sale for
resale and is not subject to sales tax if the restaurant presents a resale
certificate to the vendor of the ice as required by M.G.L. c. 64H, § 8. If
ice is sold both for refrigeration and for sale in iced drinks, the charges may
be segregated. If the charge is segregated both on the bill to the customer and
in the vendor's books and records, only the sale of ice for refrigeration is
subject to tax. If the charges are not segregated, the entire sale is subject
to tax. Ice sold from a vending machine is presumed to be ice used for
household consumption and is therefore not taxable.
The following examples illustrate the provisions of the
foregoing 830 CMR 64H.6.5(4):
Example 1: A powdered preparation
containing eggs, sugar, cocoa and various minerals is to be mixed with water
and eaten in lieu of meals. This preparation is exempt from sales tax as a food
substitute, unless it is sold by a restaurant.
Example 2: A health food store sells a
protein energy bar which contains vitamins and minerals. The bar is
carob-coated, cocoa-flavored and consists primarily of sugar and other
sweeteners. Other ingredients include vegetable oils and peanut butter. The
energy bar is candy exempt from sales tax unless it is sold by a
restaurant.
(5)
Restaurant
Meals.
(a)
General. The sales tax is imposed on all meals sold by
a restaurant or a restaurant part of a store.
(b)
Restaurant.
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 theater 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 26 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 830 CMR 64H.6.5(5)(e)1. through 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 consumptions 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.
(f)
Caterers.
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.
(6)
Store Sales.
(a)
General Rules. A
"store" is any establishment that is not primarily in the business of selling
meals. A "restaurant part" is an area, section, or counter, etc., within a
store from which meals are sold. An establishment may use the term store,
bakery, delicatessen, convenience store, market, etc. in its name, but if it is
primarily engaged in the business of selling meals it is a restaurant for
purposes of the sales tax. The following general rules apply to sales by a
store.
Taxable Store Sales
1.
Beverages. The
sale of a poured beverage, such as a cup of coffee or a fountain soda, is
taxable.
2.
Snacks/Unpackaged. The sales of unpackaged baked goods
or other snacks by a store are taxable unless specifically exempt under the
bakery rules. See830 CMR 64H.6.5(6)(b)1. for bakery
rules.
3.
Hot
Foods. The sale by a store of any prepared food item
heated is taxable.
4.
Entrees. The sale
by a store of single portion size entrees such as lasagna, eggplant parmesan,
or quiche prepared for human consumption is taxable if heated
(see830 CMR 64H.6.5(6)(a)3.) but also taxable if refrigerated
if the store provides heating units (typically microwave) in which customers
may heat the entrees. Such entrees are taxable whether or not prepackaged.
Entrees sold frozen are not taxable.
5.
Combination
Plates. The sale by a store of prepared foods sold as a unit in a
manner reasonably and commonly considered a meal is taxable whether or not
heated. The sale by a store of prepared foods that are otherwise not taxable do
not become taxable simply because they are purchased together. The sale of a
1/2 pint of potato salad and a 1/2 pint of tuna salad by a store for
off-premises consumption is not taxable unless they are presented or served as
a unit in a manner that is reasonably and commonly considered a meal, such as
sold as a plate or packaged as a dinner for a single price.
6.
Quick Meals. The
sale by a store of quick meals prepared for immediate human consumption such as
hot dogs, hamburgers, pizza slices, or soup, is taxable if heated (
see
830 CMR 64H.6.5(6)(a)3.) but also taxable if refrigerated if the store
provides heating units (typically microwave) in which customers may heat the
quick meal. Such quick meals are taxable as described above, whether or not
prepackaged. Quick meals sold frozen are not taxable. The sale of sandwiches is
taxable whether or not prepackaged and whether or not heated.
Nontaxable Store
Sales
7.
Beverages. Beverages sold by a store in unopened
original containers for off-premises consumption are not taxable, whether
purchased separately or in combination with other foods.
8.
Snacks/prepackaged. The sales by a store of
prepackaged baked goods or other snacks such as a prepackaged pastry, popcorn,
chips, candy, ice cream novelties, etc., for off-premises consumption are not
taxable. Prepackaged connotes packed in a sealed, unopened original container
intended and manufacturer marked for individual sale.
9.
Party Packs and Party
Platters. "Party pack, party platter" is an assortment of meats,
poultry, or cheeses sold by weight or count, cut and arranged on platter(s),
sold with other foods, and designed to serve a number of people. The sale of
party packs or party platters by a store is not taxable. Nonfood items sold as
part of a party pack or party platter, such as paper plates and plastic
cutlery, are subject to the sales tax. If the vendor does not separately state
the charge for these items, and collect and pay over the tax, the vendor must
pay the use tax on the cost to the vendor of the nonfood items.
(b)
Store sales by
type. If an establishment is not a restaurant, that is, it is not
primarily engaged in the business of selling meals, the basic rules announced
above, under store sales, apply. The following provisions focus on rules as
they affect a particular type of store since the activity and concerns of these
stores vary.
1.
Bakery.
a.
Baked goods in units of six or more. Bakery products
(baked goods) sold in units of six or more for off-premises consumption are not
subject to tax wherever sold. 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 a whole pie, cake, loaf of bread, etc.
b.
Bakery without restaurant
sales. When a bakery sells only baked goods, its sales of baked
goods for off-premises consumption are not subject to tax regardless of the
number of baked goods sold.
c.
Bakery as restaurant. When a bakery sells food items
commonly sold at snack bars, coffee shops, or luncheon counters, such as
taxable beverages or sandwiches, the entire bakery is considered a restaurant.
Its sales of all baked goods for consumption on the premises are subject to
tax, and its sales of baked goods sold for consumption off-premises are subject
to tax, except when sold in units of six or more.
d.
Bakery with restaurant
part. When the bakery in some way segregates the restaurant part
of the store, the bakery part remains a store and only the restaurant part is
considered a restaurant for tax purposes. A separate restaurant part cannot be
established if taxable beverages or other meals must or may be purchased from
the area, section, counter, etc. from which baked goods are sold. Some
separation of space and function is necessary.
Example 1: Establishment A is engaged
in the sale of baked goods but also sells coffee and juice for its customers'
convenience. All of A's sales are made from the same counter. Establishment A
is a restaurant because it sells meals (beverages and baked goods) and has made
no effort to establish a restaurant part. Its sales of beverages and baked
goods in units of five or fewer are taxable even when the sale is made without
a beverage.
Example 2: Establishment B is engaged
in the sale of baked goods but also sells coffee and juice for its customers'
convenience. B has a "Breakfast Express" line from which it sells baked goods
in combination with beverages. Beverages may be purchased only from this line.
B has effectively created a restaurant part within its bakery. The sales from
the restaurant part are taxable except baked goods in units of six or more. The
sales of baked goods from the bakery are exempt regardless of the number sold
since the rest of the bakery maintains its status as a store.
2.
Convenience
store.
a. A convenience, or other
store's, sales of the following items
are taxable.
- Beverages, poured or fountain type;
- Combination plates sold as a unit reasonably and commonly
considered a meal whether or not heated;
- Entrees (single portion) such as lasagna, eggplant parmesan,
or quiche, heated, but also if refrigerated if the store provides a heating
unit (entrees sold frozen are not taxable), and whether or not
prepackaged;
- Heated, prepared foods;
- Quick meals, such as hot dogs, hamburgers, pizza, or soup,
heated, but also taxble if refrigerated if the store provides a heating unit
(quick meals sold frozen are not taxable) and whether or not
prepackaged;
- Sandwiches whether or not prepackaged and whether or not
heated; and
- Snacks unpackaged including, for example, unpackaged baked
goods in units of less than six, or fresh popped popcorn.
b. A convenience or other store's sales of
the following items for off-premises consumption
are not
taxable:
- Beverages in unopened, original containers;
- Food products, such as a can of coffee or loaf of
bread;
- Party packs and party platters; and
- Snacks prepackaged including, for example, baked goods,
candy, ice cream novelties, or chips in sealed, unopened, original containers
intended and manufacturer marked for individual sale.
3.
Delicatessen.
a. A
delicatessen or other store's sales of the following items
are
taxable:
- Beverages, poured or fountain type;
- Combination plates sold as a unit reasonably and commonly
considered a meal whether or not heated;
- Entrees (single portion) such as lasagna, eggplant parmesan
or quiche prepared for immediate human consumption, heated, but also if
refrigerated if the store provides a heating unit (entrees sold frozen are not
taxable), and whether or not prepackaged;
- Heated prepared foods;
- Quick meals, such as hot dogs, hamburgers, pizza, or soup,
heated, but also if refrigerated if the store provides a heating unit (quick
meals sold frozen are not taxable), and whether or not prepackaged;
- Salads sold as a unit in a manner reasonably and commonly
considered a meal such as on a plate or otherwise packaged as a meal;
- Salads from a salad bar;
- Sandwiches, whether or not packaged, and whether or not
heated; and
- Snacks unpackaged including, for example, baked goods in
units of less than six.
b. A
delicatessen or other store's sales of the following items for off-premises
consumption are
not taxable:
- Beverages in unopened, original containers;
- Condiments and spreads;
- Meat, poultry, or fish items, for example, fried chicken or
barbecued spare ribs, if sold unheated;
- Party packs and party platters;
- Salads except salads from a salad bar and salads sold in a
manner reasonably and commonly considered a meal;
- Sandwich meats or cheeses, sliced or whole;
- Snacks prepackaged including, for example, baked goods,
candy, ice cream novelties, or chips in sealed, unopened original containers
intended and manufacturer marked for individual sale; and
- Whole, cooked meat, poultry, or fish sold
unheated.
4.
Grocery store, supermarket. A grocery store or
supermarket's sales from its bakery or delicatessen are taxed as described
above in 830 CMR 64H.6.5(6)(b)1. and 3. The sales of salads from a salad bar
within a store are taxable.
Example 1: Establishment A is a
section within a supermarket that sells only baked goods and no beverages or
other meals. The section is a bakery and its sales of baked goods are not
taxable regardless of the number sold.
Example 2: Establishment B is a
section within a supermarket that sells baked goods. Taxable beverages may be
purchased from the same counter. The bakery section is a restaurant for sales
tax purposes and its sales of baked goods are taxable except those sold in
units of six or more. The sales of poured or fountain beverages are subject to
tax.
5.
Market. A "market" is an establishment that
specializes in the sale of raw meat, poultry, or fish. These establishments are
commonly referred to as meat markets, farm stores, or fish markets. Generally,
the sale of prepared meat, poultry, or fish items heated or in a combination
plate is taxable. When the sales of heated prepared meat, poultry or fish items
constitute less than 15% of a single store's total gross receipts from sales
from all of its activities
and the store does not sell other
meals, the store is not a restaurant and the sale of prepared meat, poultry or
fish items is not taxable. See
Commissioner of Revenue v.
Jones, 28 Mass. App. Ct. 332 (1989). A vendor exempting the sales of
items from tax on the basis of this rule must be able to predict accurately the
percentage of these sales to the store's total gross receipts for the year,
since the vendor is responsible for the tax due even if no tax was collected.
"Prepared meat, poultry, and fish items,"
include meat, poultry, or fish parts or pieces, such as fried chicken wings or
barbecued spare ribs. This definition does not include whole cooked, sliced, or
unsliced meat, poultry, or fish such as a whole turkey or ham. This definition
also does not include sliced meat, poultry, or fish sold by weight such as
bologna, cold boiled ham, turkey loaf, etc.
Example 1: A fish market has a counter
from which it sells heated fried fish, french fries, and cole slaw. The counter
is a restaurant part and these sales are taxable.
Example 2: A poultry farm sells
barbecued chicken pieces but no other prepared foods. Its sales of chicken
pieces constitute less than 15% of its total gross sales from all its
activities. The farm's sale of chicken pieces is not taxable.
6.
Video store. If a
video store sells refreshments for off-premises consumption the rules as to
store sales apply.
a. A video or other store's
sales of the following items
are taxable.
- Beverages, poured or fountain type; and
- Snacks unpackaged, for example, fresh popped
popcorn.
b. A video or other
store's sales of the following items for off-premises consumption
are
not taxable.
- Beverages in unopened, original containers; and
- Snacks prepackaged including, for example, baked goods,
candy, ice cream novelties, or chips in sealed, unopened, original containers
intended and manufacturer marked for individual sale.
(7)
Sales Price. The sales tax imposed on a meal is based
on the sales price of that meal. The sales price is the total amount paid by a
purchaser to a vendor as consideration for the sale of the meal, valued in
money or otherwise. The sales price on which the sales tax is based includes
any amount paid for services that are a part of the sale and any amount for
which credit is given to the purchaser. The sales price includes the cost of
the property sold, the cost of materials used, labor or service cost, interest
charges, losses, or other expenses.
(a)
Service Charges Included in the Sales Price of Meals.
Generally, separately stated amounts designated as service charges added to the
price of a meal are included in the sales price, when such amounts are in fact
part of the consideration for food and beverages. However, separately stated
amounts designated as gratuities, service charges or tips are not included in
the sales price of the meal if they are distributed by the vendor to the
service employees, wait staff employees or service bartenders as provided in
M.G.L. c. 149, § 152A. If the service charges are paid only in part to the
waiters or other service personnel, the charges are included in the sales price
of the meal and subject to the sales tax.
(b)
Room Rentals Included in the
Sales Price of Meals.
1.
Definition: Operator, as defined in M.G.L. c. 64G,
§ 1(f).
2.
Room
Rented for Serving a Meal. If a customer rents a room for the
purpose of serving a meal and the meal is provided by the operator of the room,
the charge for the room, whether or not separately stated, is included in the
sales price of the meal.
3.
Room Rented for the Purpose Other Than Serving a Meal.
When a customer rents a room for purposes other than the serving of meals and
there is an incidental serving of light refreshments by the operator of the
room for an additional charge, the sales tax applies only to the sales price of
the refreshments, if the charge for the refreshments is separately stated on
both the records of the vendor and the bill to the customer. If the charges are
not separately stated, the entire amount charged is subject to the sales tax.
The provisions of 830 CMR 64H.6.5(7)(b) are illustrated by the
following examples:
Example 1: A business holds a lunch
meeting in a function room at a hotel. The charge includes the cost of the
lunch served and a separately stated room rental fee. The sales tax on meals is
imposed upon the entire charge because the room was rented for the purpose of
serving a meal.
Example 2: A corporation holds an
all-day conference in a function room at a hotel. The hotel serves coffee and
pastries in the morning but not lunch. The hotel charges a room rental fee and
an additional charge for the coffee and pastries served. The separate charge is
reflected both on the bill to the customer and on the books and records of the
hotel. The sales tax is imposed only upon the sales price of the coffee and
pastries because the room was rented for purposes other than serving a
meal.
(c)
Package plan, mandatory charges included in sales price of
meals.
1.
Definition:
Package Plan, for the purposes of 830 CMR 64H.6.5, a package plan
is an arrangement for a private function, sold for a single price which
includes a meal or meals, other activities such as entertainment, or other
items such as place settings, flowers, or prizes, and may or may not include
the rental of a function room.
2.
Package plans. The charge for a room rented for the
purpose of serving a meal is part of the total cost of providing meals and is
included in the sales price of the meal subject to tax whether or not the
charge is separately stated. If other various charges included in a package
plan are mandatory, the sales tax on meals is imposed upon the total amount
charged for the package plan, whether or not the charges are separately stated.
However, if the various charges (other than room rental) are not mandatory and
the vendor of the package plan separately states and reasonably allocates the
sales price of the meals and the other items or activities on both the bill to
the customer and on the vendor's books and records, the sales tax is imposed
only on the sales price of the meals, including the charge for the room rented.
The provisions of 830 CMR 64H.6.5(7)(c) are illustrated by the
following example:
Example: Company X is engaged in the
business of providing wedding receptions and private parties. The customer pays
a fee for a package plan under which Company X provides a function room in
which to hold the reception or party, a meal, and an orchestra. The charge for
the room and the meal is subject to tax. The charge for the orchestra is not
mandatory and is separately stated. The sales tax is imposed only upon the
sales price of the meals and the room, and not on the price of the
orchestra.
3.
Bed and Breakfast. Meals served in owner-occupied one,
two, and three room bed and breakfast homes as defined in M.G.L. c 64G, §
1, are exempt from the sales tax. M.G.L. c. 64H, § 6(h). Any tax collected
on meals served in breakfast homes before August 10, 1988 must be paid over to
the Commonwealth. The value of meals served in bed and breakfast establishments
as defined in M.G.L. c. 64G, § 1 generally is included in the rent subject
to the room occupancy tax under M.G.L. c. 64G. St. 1988, c. 31. However the
operator of a bed and breakfast establishment may apply the room occupancy
excise to the room rent only and the sales tax to the sales price of the meals
if the operator separately states and reasonably allocates the room rent and
the sales price of the meals on both the bill to the guest and on the
operator's books and records.
(d)
Admission charges for
entertainment or recreation. The sales tax is imposed upon
admission charges collected by a place of entertainment where food, alcoholic
beverages, or both are sold, unless all the following requirements are met:
1. a ticket is sold and collected as evidence
of the admission charge;
2. the
patron is not required to purchase any food or beverages;
3. the charge is for admission only and does
not include any payment for food or beverages; and;
4. the admission charges are segregated from
other receipts in the books and records of the place of
entertainment.
(e)
Discounts, Coupons and Rebates. See
830 CMR
64H.1.4.
(8)
Nonreturnable Containers,
Purchases by Vendors.
(a)
General Rule. Sales of containers to vendors are not
taxable, subject to the proper use of Exempt Container Certificates. Packaging
is considered an exempt container when it will be used by the vendor's
customers to transport food or drink off the premises. A seller may sell
packaging to a vendor tax free if the seller accepts a properly completed
Exempt Container Certificate. The sale of packaging to a vendor is taxable when
the packaging is used on the premises by the vendor's customers. M.G.L. c. 64H,
§ 6(q). Jan Co. Central, Inc. v. Commissioner of Revenue,
405 Mass. 686 (1989).
(b)
Definition. The term container is limited to items
used in transporting food or drink off the premises. The meaning of the term is
found by determining the use to which a particular item is put. For example,
when a paper product is used on the premises as a plate, it is not a container.
When a paper product is used to transport food off the premises, it is a
container. The term container may include, for example, paper or plastic
wrappers, cups, cup lids, or multicup holders used to carry more than one
drink, if these items are used to transport food or drink off premises. The
same items used on premises are not considered to be containers for purposes of
the M.G.L. c. 64H, § 6(q) exemption. Coffee stirrers, utensils, napkins,
and straws are examples of items not considered containers whether used on or
off premises.
(c)
Exempt Container Certificates. If upon the purchase of
packaging, the vendor is unable to determine the packaging that will qualify
under M.G.L. c. 64H, § 6(q) as exempt containers, the vendor may give the
seller of the containers an Exempt Container Certificate. The certificate may
be given and accepted only for those items that may be exempt
containers depending on later use. The certificate must be
signed by and bear the name and address of the purchaser, give a description of
the property being purchased and be otherwise properly completed as provided on
the form. Acceptance of a fully and properly completed certificate will relieve
the seller of the containers from further liability for the tax. The vendor
(container purchaser) must keep an accurate record of the containers used to
transport food or drink off premises. Packaging not so used is subject to tax.
The vendor (container purchaser) must report these purchases on its ST-9, Sales
and Use Tax Return, or its ST-10, Business Use Tax Return as applicable. See
M.G.L. c. 62C, § 16(i).
(9)
Sales of Meals Exempt when
Sold to Certain Organizations.
(a)
General Rules.
1. Sales of meals to government organizations
are exempt under M.G.L. c. 64H, § 6(d). For purposes of 830 CMR 64H.6.5(9)
through (12), government organizations include the United States and its
agencies, the Commonwealth of Massachusetts, and any of its political
subdivisions and their respective agencies and any organization that
Massachusetts is prohibited from taxing under the Constitution or laws of the
United States.
2. Sales of meals to
nonprofit organizations which are exempt from taxation under § 501(c)(3)
of the Internal Revenue Code, or sales to nonprofit organizations that are in
the process of obtaining exemption under § 501(c)(3) but have not yet
received certification from the Internal Revenue Service (hereinafter "§
501(c)(3) organizations") are exempt from tax if the following rules are met.
a. The meals sold to the § 501(c)(3)
organization will be used to further its exempt purpose;
b. The § 501(c)(3) organization has
obtained a certification from the Commissioner (i.e. Form
ST-2) stating that it is entitled to the exemption. Organizations subject to
the mandatory exceptions of § 508(c) of the Internal Revenue Code are
exempt from this requirement. Nonprofit organizations that have applied for,
but not yet received, a certification from the Internal Revenue Service
establishing their status as a § 501(c)(3) organization may be eligible
for exemption on their purchases if they have obtained temporary certification
from the Commissioner in accordance with the requirements of Technical
Information Release 96-9;
c. The
§ 501(c)(3) organization gives the vendor a properly completed Exempt
Purchaser Certificate (Form ST-5) certifying that the meals purchased are for
an exempt use. A copy of the organization's Form ST-2 must accompany the Form
ST-5 given to the vendor;
d. The
vendor keeps a record of the sales price of each separate sale, the name of the
purchaser, the date of the sale, and the number of the Certificate of
Exemption; and
e. The §
501(c)(3) organization in all other respects complies with the provisions of
830 CMR
64H.8.1: Resale and Exempt Use
Certificates.
3.
Sales of meals furnished to organizations of elderly persons or organizations
of elderly or handicapped persons residing in a qualifying housing project are
exempt from tax under M.G.L. c. 64H, § 6(cc), provided the following
requirements are met.
a. For purposes of 830
CMR 64H.6.5(9)(a)5., "organization" means a formally organized group,
consisting of ten or more individuals, with bylaws regulating its function and
the selection of officers empowered to act for it, which holds meetings on a
regular basis at least once per year. The group must have a bona fide
organizational purpose apart from claiming the exemption under M.G.L.
c. 64H, § 6(cc).
b. Sales of
meals to organizations under 830 CMR 64H.6.5(9)(a)5. are exempt from tax
provided the following requirements are met:
i. membership in the organization is limited
by the bylaws to:
(i) persons 60 years of age
or older; or
(ii) elderly or
handicapped persons living in a housing project.
For purposes of 830 CMR 64H.6.5(9)(a)5., a "housing project"
means a separate housing project or a definite portion of a housing project
provided by the housing authority of a Massachusetts city or town under M.G.L.
c. 121B, §§ 25 through 44 for "elderly persons of low income" and
"handicapped persons of low income" as defined by M.G.L. c. 121B, § 1. A
housing project includes but is not limited to the following types of housing:
cooperative apartments, community residences or such other forms of congregate
housing, or housing in separate dwelling units; units or apartments in
remodeled or reconstructed existing buildings; condominium units purchased by
the housing authority of a city or town; or units or apartments occupied under
the rental assistance program pursuant to M.G.L. c. 121B, §§ 42
through 44.
ii. the
organization has obtained a tax exemption certificate from the Commissioner in
a manner as prescribed by the Commissioner; and
iii. the organization presents a copy of the
tax exemption certificate to the vendor and confirms that all diners are
members.
4.
Sales of meals to persons, groups, or organizations not described in 830 CMR
64H.6.5(9)(a)1., 2., or 3., are generally taxable regardless of whether the
property is to be used for fundraising, unless exempt under some other
provision of law.
5. Sales of meals
to persons, groups, or organizations, including caterers, acting through or on
behalf of entities described in 830 CMR 64H.6.5(9)(a)1. or 2., are also exempt
from taxation when the purchases are made through or on behalf of the exempt
entity, provided that the substantiation requirements of 830 CMR 64H.6.5(12)(b)
or (d) as appropriate are met.
(10)
Special Rules for Sales of
Meals in Fundraising Activities.
(a) Sales of meals for fundraising purposes
by a government organization are exempt from the sales tax on meals as casual
and isolated sales if the organization does not make sales of meals in the
regular course of business. Sales of meals by a nonprofit organization for
fundraising purposes are exempt from sales tax as casual and isolated sales if
(i) the organization does not make sales of meals in the regular course of
business and if (ii) amounts derived from sales of meals are used to further
the organization's exempt purpose. If these tests are met, the number of casual
and isolated sales in a calendar year is immaterial.
(b) The Commissioner will generally presume
that amounts derived from the sale of meals purchased for fundraising
activities are used to further the organization's exempt purpose.
(11)
Exempt
Organizations -- Sales of Meals in the Regular Course of Business.
In general, whether a nonprofit or governmental organization sells meals in the
regular course of business is a question of fact, to be determined from an
examination of the facts and circumstances surrounding the transactions and
overall operations of the organization. The Commissioner will consider the
following factors in deciding whether meals are sold in the regular course of
an organization's business:
(a) whether the
organization conducts sales from a retail establishment that it operates. For
purposes of 830 CMR 64H.6.5(11)(a) a retail establishment is a restaurant or
other premises from which sales of meals are regularly conducted.
(b) whether the organization is required to
hold a vendor's registration certificate pursuant to M.G.L. c. 64H, § 7,
and is ordinarily engaged in making sales of meals.
(c) whether the proceeds from sales of meals
constitute unrelated business income, within the meaning of applicable Internal
Revenue Code provisions and the regulations promulgated thereunder.
(12)
Special
Substantiation Requirements. For purposes of 830 CMR 64H.6.5(9)
through (11), the following substantiation requirements apply:
(a)
Sales Directly to Government
Organizations. Government organizations are encouraged to obtain a
Certificate of Exemption (Form ST-2) and submit to the vendor a properly
executed Exempt Purchaser Certificate (Form ST-5) and a copy of its ST-2, if
available, when making exempt purchases. Vendors must retain forms in the same
manner as other sales tax records. See Record Retention
regulation,
830 CMR
62C.25.1, for further recordkeeping
requirements. If the government organization does not present Form ST-5, the
vendor must maintain other adequate documentation verifying that the purchaser
is exempt, e.g., a copy of the organization's check or credit
card.
(b)
Sales to
Entities Purchasing through or on Behalf of Government
Organizations. Entities purchasing through or on behalf of
government organizations must certify that they are doing so by presenting a
properly executed Form ST-5 when making such purchases. Form ST-5 may be made
out by the exempt organization or the purchaser, but must contain the name,
address, and, if available, the exemption number of the government organization
on whose behalf purchases are made, as well as a description of the property
purchased. At the time of purchase, the purchaser must attach to the Form ST-5
submitted to the vendor, a copy of the government organization's Form ST-2 if
available. Vendors must retain forms in the same manner as other sales tax
records. See Record Retention regulation,
830 CMR
62C.25.1, for further recordkeeping
requirements.
(c)
Sales
Directly to Organizations Exempt under I.R.C. § 501(c)(3). A
§ 501(c)(3) organization must first obtain a Form ST-2 (or temporary
certificate: see TIR 96-9) from the Commissioner certifying that it is entitled
to exemption under M.G.L. c. 64H, § 6(e). When making purchases these
organizations must submit to the vendor a copy of their Form ST-2 attached to a
properly executed Form ST-5. Vendors must retain both forms in the same manner
as other sales tax records. See Record Retention regulation,
830 CMR
62C.25.1, for further recordkeeping
requirements.
(d)
Sales
to Entities Purchasing Through or on Behalf of Organizations Exempt Under
I.R.C. § 501(c)(3). Entities purchasing property through or
on behalf of organizations exempt under I.R.C. § 501(c)(3) must submit to
the vendor a copy of the organization's Form ST-2 attached to a properly
executed Form ST-5 from the organization on whose behalf it is making
purchases. Vendors must retain both forms in the same manner as other sales tax
records. See Record Retention regulation,
830 CMR
62C.25.1, for further recordkeeping
requirements.
The provisions of 830 CMR 64H.6.5(12)(b) and (d) are
illustrated by the following example:
Every year, the parent teacher organizations (PTO) at two
different high schools conduct a "Spring Fling" for fundraising purposes to
benefit their school. Each PTO hires a band, purchases flowers, and contracts
with a local hotel for a banquet hall and the provision of 100 meals.
Additionally, the PTO reserves a block of 30 rooms at the hotel for
parents.
One high school in this example is a public school in Boston
(Public High). The PTO for Public High holds no exemption itself, but would
like to avail itself of the exemption which would be available to Public High
under M.G.L. c. 64H, § 6(d) had Public High purchased the property
directly. In order to substantiate a claim of exemption under M.G.L. c. 64H,
§ 6(d), Public High PTO must submit to the vendor a properly executed Form
ST-5 and must attach a copy of Public High's Form ST-2 if the Form ST-2 is
available. If Public High does not present these forms to PTO, the PTO may
itself fill out the appropriate sections of Form ST-5 and submit the form to
vendors when making purchases through or on behalf of Public High.
The other high school is a local non-governmental high school
(Private High) that has § 501(c)(3) status. The PTO for Private High does
not itself have § 501(c)(3) status but would like to avail itself of the
exemption which would be available to Private High under M.G.L. c. 64H, §
6(e) had Private High purchased the property directly. In order to substantiate
a claim of exemption under M.G.L. c. 64H, § 6(e), Private High PTO must
submit to the vendor a properly executed Form ST-5 and must attach a copy of
Private High's Form ST-2 or temporary Form ST-2. If the PTO itself has applied
for and received § 501(c)(3) status, the substantiation requirements in
830 CMR 64H.6.5(12)(c) apply.
Generally, if a customer rents a room for the purpose of
serving a meal and the meal is provided by the operator of the room, the charge
for the room is subject to sales tax whether or not the charge for the room is
separately stated from the charge for the meal. See 830 CMR 64H.6.5(7)(b)2.
Here, however, the rental of the banquet hall is exempt as a sale to an entity
purchasing through or on behalf of an organization exempt under I.R.C. §
501(c)(3) or an entity purchasing through or on behalf of a government
organization.
The rental of the 30 rooms in this example for sleeping and
living purposes is subject to the Room Occupancy Excise under M.G.L. c. 64G,
§ 1. There is no exemption for room rentals under M.G.L. c. 64G
corresponding to the exemption under the sales tax statute for purchases by
governmental and § 501(c)(3) organizations and entities purchasing through
or on their behalf.
(e) The
substantiation requirements of 830 CMR 64H.6.5(12) are in addition to any other
recordkeeping requirements imposed by law.
(13)
Sales of Meals Exempt When
Sold by Certain Other Institutions and Organizations.
(a)
Health and Day Care
Facilities. All sales of meals by hospitals, sanatoria,
convalescent or nursing homes, boarding homes for the aged licensed under
M.G.L. c. 111, § 71, and institutions and private houses licensed as
residential or day care facilities under M.G.L. c. 19, § 29, are exempt
when the meals are both prepared and served by employees of the institution, or
by persons doing uncompensated volunteer work for it, and the meals are served
there. For the purposes of 830 CMR 64H.6.5(11)(a) "employee," in addition to
its usual meaning, includes independent contractors and their staff where the
independent contractors constitute no more than 50% of the "employees" engaged
to prepare and serve meals.
The provisions of 830 CMR 64H.6.5(13)(a) are illustrated by the
following examples:
Example 1: A state-funded organization
located on the grounds of a licensed state hospital provides training to
handicapped persons. The training includes preparing and serving meals at the
organization's coffee shop. The organization is not a hospital, and the sale of
meals prepared and served by the trainees is subject to the sales tax.
Example 2: Employees of a hospital
prepare and serve meals in the hospital's cafeteria. The cafeteria provides
meals for paid staff, students, patients, and visitors. All these sales are
exempt from the sales tax.
(b)
Hot Lunch Programs for
Elderly Persons. The sale of meals to authorized elderly persons,
as defined by M.G.L. c. 15, § 1, through school lunch programs qualifying
under M.G.L. c. 15, § 1L is exempt from the sales tax.
The provisions of 830 CMR 64H.6.5(13)(b) are illustrated by the
following example:
Example: The school committee of Town
X, with the approval of the Commissioner of Education, has extended the school
lunch period to serve lunches to persons 60 years of age and over and their
spouses. The lunch program meets the conditions and restrictions of M.G.L. c.
15, § 1L. The sale of meals through the program is exempt from the sales
tax.
(c)
Churches, Synagogues, and other Religious
Organizations. The sale of meals by churches, synagogues, and
other religious organizations, is exempt from the sales tax if all the
following conditions are met:
1. the meals
sold are prepared and served by members of the church, synagogue, or other
religious organization;
2. the
meals sold are served only to members of the church, synagogue, or other
religious organization and their invited guests. Whether an individual is an
"invited guest" depends on all the facts and circumstances, but the term
"invited guest" does not include the general public; and the proceeds from the
sales of meals, net of expenses, must be used exclusively to further the
religious and charitable purpose for which the church, synagogue or other
religious organization was formed;
3. the meals are served on the premises of a
church synagogue, or other religious organization; and
4. Sales by a vendor regularly engaged in the
business of selling meals are generally not exempt from tax under M.G.L. c.
64H, § 6(cc). In some circumstances, however, a vendor who is a member of
the religious organization may prepare meals served to the other members and
guests of the organization. Such sales of meals are exempt under § 6(cc)
if the vendor receives no profit from the sales (any receipts in excess of
necessary expenses being donated to the organization) and all other conditions
of 830 CMR 64H.6.5(13)(c) are met.
The provisions of 830 CMR 64H.6.5(13)(c) are illustrated by the
following examples:
Example 1: A synagogue contracts with
a caterer to prepare and serve a meal on synagogue premises to benefit its
building fund. Since the meals are not prepared and served by synagogue
members, the sales of the meals by the synagogue are not exempt under M.G.L. c.
64H, § 6(cc); they may, however, be exempt as casual and isolated sales
under M.G.L. c. 64H, § 6(c). See
830 CMR
64H.6.1.
Example 2: A church holds a dinner
meeting at a retreat camp owned by the church. The meals are prepared and
served by church members to church members. Meals served at the retreat camp
are served on church premises. The proceeds help to maintain the camp. The
sales of the meals are not taxable.
(d)
Educational
institutions.
1.
Sales to Students. The sale of meals to students by
educational institutions, or their agents, with a regular faculty and
curriculum and a regularly enrolled body of students is exempt from the sales
tax on meals. To substantiate the exempt sales, the books and records of the
educational institution must separate the gross receipts between sales to
students and sales to non-students.
2.
Sales to
Non-Students. The sale of meals by educational institutions to
people who are not students, for example, to faculty and staff, is subject to
the sales tax on meals.
The provisions of 830 CMR 64H.6.5(13)(d) are illustrated by the
following examples:
Example 1: A university operates a
snack shop in its student union to sell sandwiches, soft drinks, and snack
items to students, faculty, and staff. The sales of meals to university
students are exempt from the sales tax on meals. The sales of meals to the
faculty and staff are subject to the sales tax on meals.
Example 2: A public school system
operates a nonprofit culinary arts training program. As part of the program,
students operate a restaurant which serves low-cost meals to students and the
public. The sale of meals to students is exempt from the sales tax; the sale of
meals to the public is subject to the sales tax.
Example 3: A vending machine is
located in a high school in an area designated primarily for students. The sale
of sandwiches, soft drinks, and snack items such as potato chips from the
machine is exempt from the sales tax on meals.
(e)
Summer Camps.
The sales of meals served by summer camps for children 18 years of age or under
or for developmentally disabled individuals as defined in M.G.L. c. 64H, §
6(cc) are exempt from the sales tax, regardless of the status of the consumer
of the meals. A summer camp as described above will not lose its exemption from
tax on its sale of meals if the summer camp offers its facilities for no more
than 30 days during the off-season to individuals 60 years of age or older. The
sales of meals served by summer camps to individuals 60 years of age or older
during the off-season period as described above are also exempt from tax. The
exemption from tax for the sale of meals served by summer camps is effective on
June 1, 1988.
(f)
Commercial Airlines.
1.
Sales to
Passengers. The furnishing of meals to commercial airline
passengers in commercial aircraft, whether the aircraft is in flight or on the
ground, is exempt from the sales tax.
2.
Sales to Airline.
The sale of meals to a commercial airline for consumption by its passengers in
the aircraft is exempt from the sales tax.
(g)
Assisted Living
Residences. The sales of meals served in assisted living
residences certified pursuant to M.G.L. c. 19D are exempt from the sales tax.
The exemption extends to meals served to residents, guests, and
staff.
(14)
Sales of Meals Exempt When Purchased with Food Stamps.
(a)
General. M.G.L.
c. 64H, § 6(kk) exempts from tax sales of tangible personal property
purchased with federal food stamps and not otherwise exempt under M.G.L. c.
64H. Vendors and meal providers as defined in
7
U.S.C. §
2012(g) that
participate in the federal food stamp program should not collect sales tax on
otherwise taxable sales of any item purchased with food stamps. When a food
stamp recipient uses a combination of cash (credit card, check,
etc.) and food stamps in making a food purchase the vendor or
meal provider must allocate the food stamps first to food stamp eligible items
that otherwise would be taxed. Thus, items currently taxable but eligible to be
purchased with food stamps (such as cold sandwiches) would be exempt to the
extent of the dollar value of the food stamps received.
(b)
Meals for the
Homeless. Homeless food stamp recipients (including newly eligible
residents of temporary shelters for the homeless) may use their food stamps to
purchase prepared meals served by an authorized public or private nonprofit
establishment, approved by an appropriate State or local agency. Providers
should not collect sales tax on meals purchased with food stamps. When a
homeless food stamp recipient uses cash (credit card, check, etc.) or a
combination of cash and food stamps when purchasing a meal the amount paid for
with cash is subject to tax unless the sale by the provider is otherwise
exempt. If the meals are free or "payment" is an optional donation, the sales
tax does not apply.
The provisions of 830 CMR 64H.6.5(14)(a) are illustrated by the
following example.
Example 1: A food stamp recipient
purchases $50.00 worth of groceries. Payment is made with $10.00 in food stamps
and $40.00 in cash. The purchase included $38.00 worth of tax exempt items and
$12.00 worth of food that may be purchased with food stamps but is subject to
Massachusetts sales tax unless purchased with food stamps (eligible taxable
items). The dollar value of the food stamps ($10.00) is first applied against
the purchase of the eligible taxable items ($12.00). The balance ($2.00) is
taxable.
(15)
Liquor License Holders; Innkeepers and Common
Victuallers.
(a)
Liquor License Holders.
1.
Definition.
Liquor License Holder, a person who has been licensed
to sell alcoholic beverages under M.G.L. c. 138.
2.
Sale of Alcoholic
Beverages. The liquor license holder is a vendor of all alcoholic
beverages sold at the licensed premises, and is jointly and severally
responsible with any other person selling such beverages on the premises for
the collection and payment of the tax imposed by M.G.L. c. 64H.
3.
Sale of Meals without
Alcoholic Beverages. The liquor license holder is presumed to be a
vendor of all meals sold without alcoholic beverages at the licensed premises.
As a presumed vendor of such meals, the liquor license holder is responsible
for the collection and payment of the tax imposed by M.G.L. c. 64H. The liquor
license holder may rebut this presumption by showing 1) that a person other
than the liquor license holder sold the meals without alcoholic beverages; 2)
that this person was not the agent or otherwise acting on behalf of the liquor
license holder; and 3) that the two parties agreed previously in writing that
the person other than the liquor license holder was responsible for the
collection and payment of the tax imposed on such meals by M.G.L. c.
64H.
(b)
Innkeepers and Common Victuallers.
1.
Definition.
Innkeeper or Common Victualler, a holder of an
innkeeper's or common victualler's license to sell meals without alcoholic
beverages under M.G.L. c. 140.
2.
Meals Sold on Licensed Premises. The innkeeper or
common victualler is a vendor of all meals sold without alcoholic beverages at
the licensed premises, and is jointly and severally responsible with any other
person selling such meals on the premises for the collection and payment of the
tax imposed by M.G.L. c. 64H.
(16)
Recordkeeping.
(a)
General. Refer
to
830 CMR 62C.25.1
"Record Retention" for recordkeeping and record retention rules applicable to
vendors. In addition to other applicable provisions of
830 CMR
62C.25.1, section (8)(g) requires a vendor of
meals to maintain complete and accurate records of all sales of meals and
alcoholic beverages, and all sales of non-taxable food and beverages. The
records must include cash register tapes showing each individual transaction,
alcoholic beverages bar checks, dining room meals checks, and a daily receipts
book or record. Vendors must retain copies of sales tax on meals returns
filed.
(b)
Dining Room
Meals Checks. Dining room meals checks must be serially numbered
and used in sequence for all meals served with no number being repeated for a
one year period. Dining room meals checks must contain the name and address of
the vendor and the wording: "5% Mass. Meals Tax" with a space
opposite for insertion of the amount of the tax. All dining room meals checks
must be securely tied and preserved in dated, daily bundles, and the daily tax
recordings must be entered in the vendor's records to substantiate the tax
return.
(c)
Caterers'
Records. Caterers must record all catering business in a
reservation ledger or book which should state all dates of jobs, names of
purchasers, numbers of persons served, price totals, and the proper amount of
tax for all meals served. Caterers not using dining room meals checks must
serially number bills or contracts and preserve them with the reservation book
or ledger.
