New Sales and Use Tax Rules May Apply to Restaurants Doing Business in Georgia

June 3, 2014

The Georgia Department of Revenue has proposed new rules to address the application of sales and use taxes to purchases and sales made by restaurants and similar establishments that sell prepared food. These new rules will likely provide significant tax savings to many companies in the industry.

Some examples of non-taxable purchases by restaurants set forth in the new rules are as follows:

a) Disposable food packaging used to contain food provided to the customer
Examples: Containers, boxes, wrappers, cups, dinner plates, trays, platters, and the accompanying lids.

b) Tangible personal property sold along with meals
Example: A toy that will be sold as a component part of a meal.

c) Single-use items provided with meals sold
Examples: Straws, swizzle sticks, stirrers, napkins, doilies, forks, sporks, knives, spoons, toothpicks, chopsticks, tray liners, and pre-moistened disposable cloths.

d) Condiments and other food items provided with meals sold
Examples: Ketchup bottles placed on dining tables for customers' use. Ketchup packets placed in bags containing "to go" meals sold to customers. Ketchup made available in packets or by dispenser on a self-service island. Tortilla chips and salsa provided as a complement to the sale of other food or beverage items. The proposed rules contain many other examples and definitions of taxable and non-taxable purchases and sales by restaurants and similar establishments.

Comments on the proposed rules may be submitted to the Department of Revenue no later than 10:00 AM on June 19, 2014. For further information, please call Julian Fortuna at 678.336.7191.

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