Current through September 17, 2024
083.01 Retail sales of prepared food,
including sales by caterers and concessionaires, and all sales of prepared
food, food, and food ingredients through vending machines are taxable. Retail
sales of alcoholic beverages are taxable, whether sold packaged or sold by the
drink. (
Reg-1-031,
Coin-Operated Machines;
Reg-1-040,
Alcoholic Liquors Consumed on the Premises; and
Reg-1-087,
Food for Human Consumption.)
083.02
Prepared food is food generally intended for immediate consumption, and is
prepared to a point generally accepted as ready to be eaten without further
preparation. Prepared food means:
083.02A
Food sold in a heated state or heated by the retailer, including, but not
limited to hamburgers, hot dogs, pizza, egg rolls, baked beans, and nachos with
heated cheese sauce;
083.02B Two or
more foods or food ingredients mixed or combined by the retailer for sale as a
single item and not sold by weight or volume, including, but not limited to,
fountain drinks, ice cream cones, sandwiches, and salad bars; or
083.02C Food sold with eating utensils
provided by the retailer. Eating utensils include, but are not limited to,
plates, knives, forks, spoons, glasses, cups, napkins, or straws. Plates do not
include a container or packaging used to transport the food.
083.02C(1) If 75% or less of the sales of
food by the retailer are sales of prepared food described by
083.02A and
083.02B, eating
utensils are considered provided by the retailer only if they are given to the
purchaser by the retailer.
083.02C(2) If more than 75% of the sales of
food by the retailer are sales of prepared food described by
083.02A and
083.02B, eating
utensils are considered provided by the retailer if they are available on the
premises where the food is sold, regardless of whether or not the purchasers
are given the utensils or take them.
083.02C(3) The 75% test is determined in the
following manner:
083.02C(3)(a) The numerator
is the total sales of prepared food described by
083.02A and
083.02B.
083.02C(3)(b) The denominator is the total
sales of food, food ingredients, prepared food, candy, dietary supplements, and
soft drinks.
083.02C(3)(c) Exclude
sales of alcoholic beverages, tobacco, motor vehicle fuels, and all other
non-food sales from both the numerator and the denominator.
083.02C(3)(d) The percentage is calculated
using the retailer's most recently completed tax year, or if the retailer has
been in operation less than a year, the retailer must make a good faith
estimate of the percentage for the first year. The good faith estimate must be
reviewed after three months of operation and adjusted, if appropriate. A single
percentage should be calculated for all of the retailer's locations in the
state.
083.02C(4) Even
if more than 75% of the sales of food by the retailer are sales of prepared
food, sales of food or food ingredients are not taxable if the transaction is
for four or more servings as described in the "Nutrition Facts" box on the
labels as required by
21 C.F.R. §
101.9, and the retailer maintains adequate
records of each sale. If the transaction is for less than four servings, or the
retailer does not maintain adequate records of these sales, sales tax must be
collected on these food sales.
083.02C(5) Examples of food sold with eating
utensils include, but are not limited to, pieces of cake or pie served with a
fork, bagels served with a knife, and cookies or donuts served on a
napkin.
083.03 Prepared food does not include:
083.03A Food sold by a manufacturer whose
primary NAICS classification is a food manufacturer (311XX);
083.03B Bakery items such as bread, rolls,
buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes,
pies, tarts, muffins, bars, cookies, and tortillas that are not sold in a
heated state or with eating utensils;
083.03C Food that is only cut, repackaged, or
pasteurized by the seller, including, but not limited to, luncheon meats,
cheeses, meat and cheese trays, and fruit trays;
083.03D Food sold in an unheated state by
weight or volume as a single item, including, but not limited to, containers of
potato salad, coleslaw or fruit salad, pudding, and popcorn; or
083.03E Eggs, fish, meat, poultry, and foods
containing these raw animal foods requiring cooking by the consumer to prevent
foodborne illnesses.
083.04 Sales and use tax applies to the gross
receipts from preparing or serving prepared food and alcoholic beverages,
including, for example charges for food, wages, use of dishes, room service,
silverware, glassware, chairs, and tables.
083.04A Single-use, disposable food service
items available to customers as a part of the retail sale of prepared food may
be purchased for resale. Examples include, but are not limited to paper
napkins, place mats, straws, plastic utensils, and paper cups.
083.05 Charges made by a caterer,
restaurant or other retailer of prepared food or alcoholic beverages, for
furnishing employees, for example, bartenders, servers, or chefs are taxable
even if separately stated at the time of billing. Sales and use tax is not
applied to charges for announcers, coat check services, ushers, or other
persons not connected with preparing or serving of prepared food or alcoholic
beverages if the charges for these services are separately stated on the
invoice and the type of service is adequately described.
083.06 Sales and use tax applies to sales of
prepared food or alcoholic beverages by railroads, airlines, or other
transportation companies while operating in Nebraska.
083.06A If transportation companies provide
prepared food or alcoholic beverages to passengers without charge, the
transportation company's purchases of prepared food or alcoholic beverages are
considered retail sales and subject to sales or use tax regardless of where the
prepared food or alcoholic beverages are served to passengers.
083.07 If a retailer adds a charge
for gratuities or tips to charges for prepared food and alcoholic beverages,
these charges are taxable even if all or a portion of the amount is paid by the
retailer to his or her employees.
083.07A
Discretionary gratuities or tips given by customers are exempt even if charged
to the customer's account and not paid directly to the server, waiter, or
waitress at the time of sale or service.
083.08 The following sales of prepared food
are not taxable:
083.08A Prepared food sold
and served by a religious organization at a function of the religious
organization;
083.08B Prepared food
sold and served to patients, residents, and inmates of hospitals and other
institutions licensed by the state for the care of human beings;
083.08C Prepared food sold and served at
political fund-raising events by ballot question committees, candidate
committees, independent committees, and political party committees;
083.08D Prepared food sold and served to the
elderly, handicapped, or recipients of Supplemental Security Income by
organizations that accept payments from the Supplemental Nutrition Assistance
Program (SNAP);
083.08E Any
purchases made with payments from SNAP; and
083.08F Prepared food sold or served by
public or private schools, school districts, student organizations, or
parent-teacher associations pursuant to an agreement with the proper school
authorities, or in an elementary or secondary school or any institution of
higher education, public or private, during the regular school day or at an
approved function of the school or institution. (
Reg-1-092,
Educational Institutions).
083.08F(1) This
exemption does not apply to sales of prepared food by an institution of higher
education at a facility or event that is open to the public.
083.09 Fraternities,
sororities, dorms, boarding houses, retirement communities, or other
residential facilities where members or residents reside at a common location
and prepared food is provided by the residential facilities as part of the
agreement for occupancy, are not selling prepared food at retail.
083.09A If the residential facility contracts
with a caterer, restaurant, or other food service provider to provide prepared
food to members or residents of the residential facility, the charge to the
residential facility is subject to sales and use tax.
083.09B If prepared food is provided to
non-members or non-residents for a charge, or if there is a charge for
additional prepared food served to the member or resident, the charge is
subject to sales and use tax.
083.10 If a recreational, athletic, or summer
camp charges a single price for attendance, these charges are not considered
sales of prepared food and are exempt from sales and use tax.
083.11 Organizations that conduct
fund-raising functions where prepared food and alcoholic beverages are served
must compute the tax in accordance with Reg-1-090.06. The organizations may
purchase prepared food or alcoholic beverages for these functions for
resale.
083.12 If an employer pays
to have prepared food or alcoholic beverages provided to its employees, the
charge is taxable whether the employer pays the entire price, an amount per
meal, or a percentage of the price of a meal.
083.12A Management fees or subsidy payments
made by an employer to the provider, that are not based on the number served or
the amount charged, are not taxable retail sales.
083.12B Any amount paid by an employee for
the prepared food is subject to sales tax.
083.13 If a caterer, restaurant, or other
food service provider provides prepared food to its employees, no use tax is
due on the ingredients used to provide the free meals because food and food
ingredients are not taxable. Any amount paid by an employee for the prepared
food is subject to sales tax.
083.14 Concession sales are sales of food,
prepared food, or alcoholic beverages made during the conduct of an event or
recreational activity. Examples of concession sales include sales made at
athletic events, concerts, movies, plays, amusement parks, fairs, and golf
courses.
083.14A The sales tax does not have
to be separately stated and collected from the customer on concession sales of
food, prepared food, and alcoholic beverages. Retailers who do not separately
state the sales tax will determine their taxable receipts using the procedure
set out in Reg-1-008.03. Including the tax in the sales price does not exempt
the concession retailer from reporting and remitting the applicable sales tax
on the gross receipts from those sales.
083.14B The concession retailer may
separately state and collect sales tax if he or she chooses to do so.
083.14C If more than 75% of the sales of the
concession retailer are sales of prepared food under
083.02A or
083.02B as
calculated under
083.02C(3), and
eating utensils, as defined in
083.02C are
available on the premises, the concession retailer must collect sales tax on
all its sales.
