Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart B - General Fund Revenues › Article II - Sales and Use Tax › Chapter 60 - SALES AND USE TAX PRONOUNCEMENTS-STATEMENTS OF POLICY › Section 60.7 - Sale and preparation of food and beverages

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Definitions.
The
					 following words and terms, when used in this section, have the following
					 meanings, unless the context clearly indicates otherwise:
Candy and gum
-The term candy refers to
						all types of preparations commonly referred to as candy, including hard candy,
						caramel, chocolate candy, licorice, fudge, cotton candy, caramel coated
						popcorn, chocolate coated granola bars and similar items. The term gum refers
						to preparations commonly referred to as gum, including chewing gum, bubble gum
						and similar items.
Caterer
-A business engaged in the
						service of providing prepared or ready-to-eat food and beverages for immediate
						consumption at a specific meal, affair or social function, usually at the
						premises of one other than the caterer, and normally including eating and
						drinking utensils.
Eating establishment
-A business, or an
						identifiable location within a business, which advertises or holds itself out
						to the public as being engaged in the sale of prepared or ready-to-eat food or
						beverages, to customers for their immediate consumption on or off the premises.
						An eating establishment may be mobile or immobile and may or may not provide
						seating accommodations for its customers. The following are examples of eating
						establishments: restaurants, cafes, lunch counters, private and social clubs,
						taverns, dining cars, hotels, night clubs, fast food operations, honor boxes,
						pizzerias, fairs, carnivals, lunch carts, ice cream stands, snack bars, lunch
						trucks, cafeterias, employe cafeterias, theaters, stadiums, arenas, amusement
						parks, juice stands, carry out shops, coffee shops, popcorn stands, automats,
						vending machines and similar establishments.
Food and beverages
-Includes items for
						human consumption, regardless of quantity. Examples are sandwiches, hot pizza,
						salad bar items, crackers, cakes, ice cream, baked goods, potato chips, yogurt,
						hot or cold drinks, milk, natural fruit or vegetable juices, cocoa, soft
						drinks, candy, gum and other similar items whether or not the item is
						individually packaged in a sealed wrapper. The term does not include water or
						ice, malt or brewed alcoholic beverages or spirituous and vinous
						liquors.
Food retailer
-A business, or an
						identifiable location within a business, which is engaged in the sale of
						grocery type items for other than immediate consumption. The following are
						examples of food retailers: bakeries, pastry shops, doughnut shops,
						delicatessens, grocery stores, supermarkets, farm markets, convenience stores
						and similar businesses.
Gratuity
-A voluntary payment by the
						purchaser or a reasonable mandatory charge by the vendor, in lieu of the
						voluntary payment, which is billed to the purchaser for services rendered in
						connection with the purchase of food or beverages or hotel or motel
						accommodations.
Grocery type items
-Includes baked goods
						such as pies, cakes, bread and similar items; produce such as fresh fruit and
						vegetables; canned goods; meat and cheese by the pound; milk in pint, quart,
						1/2 gallon or gallon quantities; prepackaged ice cream products such as ice
						cream by the pint, quart, 1/2 gallon or gallon quantities; ice cream cakes and
						pies; frozen foods; unprepared fish and seafood; bottled honey; bottled syrup;
						jam; jelly and similar items.
Nonfood retailer
-A business engaged in
						the sale of nonfood items. The following are examples of nonfood retailers:
						department stores, service stations, clothing stores, book stores and similar
						businesses.
Selected food and beverage items
-Soft
						drinks; meals; sandwiches, including hoagies, hot dogs, hamburgers and similar
						sandwiches; food from salad bars; hand-dipped or hand-served ice-based
						products, including, ice cream, yogurt, frozen water-based products and similar
						items; hot soup; hot pizza, either whole or by the slice; other hot food items
						such as chicken, pork ribs, macaroni and cheese and similar items and hot
						drinks such as coffee, tea, cocoa and similar items.
Soft drink
-A nonalcoholic beverage, in
						either powder or liquid form, whether or not carbonated, such as soda water,
						ginger ale, colas, root beer, flavored water, artificially carbonated water,
						orangeade, lemonade, juice drinks containing less than 25% by volume of natural
						fruit or vegetable juices, and similar drinks. The term does not include fruit
						and vegetable juices containing at least 25% by volume of natural fruit or
						vegetable juice. The term does not include coffee, coffee substitutes, tea,
						cocoa and milk or noncarbonated drinks made from milk derivatives.
Vending machine
-A device which
						mechanically dispenses tangible personal property for a purchase price.
(b)
Scope
.
(1)
General.
The term food
					 and beverages includes all forms of food and beverages for human consumption.
					 The term includes selected food items, candy and gum and grocery type items.
					 The term does not include water, ice, malt or brewed and alcoholic beverages or
					 spirituous and vinous liquors. The sale of water and ice are exempt from tax.
					 The sale of malt or brewed alcoholic beverages and spirituous and vinous
					 liquors are taxed in a different manner than the sale of food and beverages.
					 Under the provisions of the sales and use tax law, the sale of food or
					 beverages may be taxable or exempt depending upon the type of food or beverage
					 or upon the basis of the location from which the food or beverage is sold. This
					 is illustrated by the following:
(i) The sale
					 of food and beverages by an eating establishment or a caterer is subject to
					 tax. However, if an eating establishment operates a separate department from
					 which grocery type items are sold, the sale of the grocery type items is exempt
					 from tax if the eating establishment fulfills the requirements in this
					 section.
(ii) The sale of selected
					 food items is subject to tax, whether or not the selected food items are sold
					 by an eating establishment, caterer, food retailer or nonfood retailer.
					 However, the sale of selected food items is exempt from tax when made by a
					 school or church in the ordinary course of its activities, by a business
					 located on the premises of the school or church in the ordinary course of its
					 activities, by a business located on the premises of the school or church and
					 the sale is in the ordinary course of the activities of the school or church or
					 by a nonprofit association which supports sports programs and which operates at
					 fixed locations on public property.
(iii) The remaining provisions of this
					 subsection address various situations under which the sale of food and
					 beverages is exempt or is subject to tax.