Food, Meals, Or Drinks

Sections 63-3607, 63-3612(2)(b), 63-3621(16), 63-3622J, Idaho Code 01. In General. This section covers the imposition of tax on sales of food, meals, or drinks. (7-1-26) 02. Clubs and Organizations. Private clubs, country clubs, athletic clubs, fraternal, and other similar organizations are retailers of tangible personal property sold by them, even if they make sales only to members. Such organizations are to collect and remit Idaho sales tax on all taxable sales. Taxability of membership dues depends upon what is provided as a part of the membership dues. (7-1-26) a. When an organization holds a function in its own quarters, maintains its own kitchen facilities, and sells tickets which include items such as meals, dancing, drinks, entertainment, speakers, and registration fees (convention), the charges may be separated and tax collected on meals, drinks, and admission fees when the ticket is sold. The organization holding the function or convention is obligated to collect and remit Idaho sales tax. (7-1-26) b. When an organization holds a function in facilities operated by a restaurant or motel and sells tickets for meals, drinks, and other services, no sales tax applies to these sales if the organization pays the restaurant or hotel sales tax on the meals and drinks furnished and all other services performed. The hotel, restaurant, or caterer will collect and remit the tax to the state. (3-31-22) 03. Colleges, Universities, and Schools. A cafeteria operated by a state university, junior college district, public school district, or any other public body is treated the same as a cafeteria operated by a private enterprise. Purchases of food for resale are not taxable; meals sold are taxable. (3-31-22) a. If a meal is paid for by cash or a meal ticket is sold to the student, tax is computed on the total sales price of the meal. If meals are sold as part of a room and board fee, the amount paid for board is separated from the amount paid for the room. Tax is calculated and collected on that part of the total fee allocated to the purchase of meals. (3-31-22) 04. Fraternities, Sororities, and Cooperative Living Group. Fraternities and sororities generally purchase and prepare food for their own consumption. The food is prepared and served in a cooperative manner by members of the fraternity or by employees hired by the group for this purpose. Purchases made by the fraternity or sorority are for consumptive use and are taxable. There is no sale of meals to fraternity or sorority members and no sales tax imposed on any allocated charge for them whether stated separately or included as part of a lump sum charge for board and room. (3-31-22) a. If a concessionaire is retained by the fraternity or sorority to furnish meals, the concessionaire is a retailer engaged in the business of selling meals; food purchases are for resale and meals supplied by the concessionaire to members of the fraternity or sorority are taxable. (3-31-22) b. If the fraternity or sorority regularly furnishes meals for a consideration to nonmembers, these meals become taxable and the fraternity or sorority is to obtain an Idaho seller’s permit. (3-31-22) c. Cooperative living groups are normally managed in much the same manner as fraternities and IDAHO ADMINISTRATIVE CODE IDAPA 35.01.02 State Tax Commission Idaho Sales & Use Tax Administrative Rules Section 042 Page 20 sororities. Food is purchased and meals are prepared and served by members of the group or their employees. The same conditions outlined above for fraternities and sororities apply to cooperative living groups. (3-31-22) 05. Boarding Houses. Sales of meals furnished by boarding houses are taxable, when they are charged separately. This applies even if the meals are served exclusively to regular boarders. Where no separate charge or specific amount is paid for meals furnished, but is included in the regular board and room charges, the boarding house or other place isn’t considered to be selling meals, but is the consumer of the items used in preparing such meals. (7-1-26) 06. Honor System Snack Sales. Honor system snack sales are those items of individually sized prepackaged snack foods, such as candy, gum, chips, cookies or crackers, which customers may purchase by depositing the purchase price into a collection receptacle. Displays containing these snacks are generally placed in work or office areas and are unattended. Customers are on their honor to pay the posted price for the article removed from the display. Purchases from these snack displays are taxable. (3-31-22) a. Sales tax applies to the total sales. The posted price is to include a statement that sales tax is included. (3-31-22) b. The formula for computing the taxable amount is: total sales/ (100% + tax rate). (7-1-26) 07. Church Organizations. Special provisions apply to religious organizations. See Section 63-3622J, Idaho Code. (7-1-26) 08. Food or Beverage Tastings. If a participant pays to participate in a food or beverage tasting, the charge to participate in the tasting is taxable. (7-1-26) 09. Nontaxable Purchases by Establishments Selling Meals or Beverages. Persons who serve food, meals, or drinks for a consideration may purchase tangible personal property without paying tax if the property is for resale to their customers, is included in the fee charged to the customer, and is directly consumed by the customer in such a way that it cannot be reused. Items which are purchased for resale and directly consumed by customers include: (7-1-26) a. Disposable containers for food or drinks. (7-1-26) b. Disposable supplies included in the price of the meal or drink, such as drinking straws, stir sticks, utensils, paper napkins, paper placemats, and toothpicks. (7-1-26) c. Candies, popcorn, drinks, or food, when included in the consideration paid for other food, meals, or drinks. (3-31-22) 10. Taxable Purchases by Establishments Selling Meals or Beverages. Tangible personal property which isn’t included in the fee charged to the customer and not directly consumed by the customer is taxable when purchased by the restaurant, bar, food server, or similar establishment. Tangible personal property which isn’t directly consumed by the customer includes property that is reusable or property that is depreciated in the books and records of the restaurant, bar, or similar establishment. Taxable purchases include: (7-1-26) a. Waxed paper, stretch wrap, foils, paper towels, garbage can liners, or other paper products consumed by the retailer, as well as linens, silverware, glassware, tablecloths, towels, and reusable napkins, furniture, fixtures, cookware, and menus. (7-1-26) b. Any tangible personal property available to the general public, such as restroom supplies and matches. (3-31-22) 11. Examples. Available at Sales and Use Tax Examples. (7-1-26)