Hotel, restaurant, and lodging

The sale of a meal by a hotel, restaurant, or other eating place is a sale of tangible personal property and is subject to sales tax. A sale of food supplies and beverage products to an eating place for use in preparing and serving meals is a sale for processing or resale and is not subject to tax. When a hotel, restaurant, or other eating place furnishes meals to its employees as part compensation, it is liable for the tax upon the cost of the meals furnished. If records to substantiate the cost of meals to employees are not available, the tax commissioner will accept figures from records kept by competing hotels, restaurants, and other eating places, as a basis on which to compute the tax. A cover charge made exclusively for the privilege of occupying space within an eating place is included in the gross receipts. A hotel, motel, or lodging accommodation used for residential housing for thirty or more consecutive days is exempt only when the accommodation includes continuous residency by at least one specific individual for thirty or more consecutive days. Any break in the continuous occupancy of the room by that individual which results in a continuous occupancy of less than thirty consecutive days subjects the accommodation to tax. If an occupancy break results in one continuous occupancy period of thirty or more consecutive days and one continuous occupancy period of less than thirty consecutive days, the exemption applies only to the occupancy period of thirty or more consecutive days. A business which rents a lodging accommodation is not exempt from tax unless the same worker or workers occupy the accommodation for thirty or more consecutive days.