Rule 560-12-2-.65 - Meals(1) The tax applies to the sale of food and food ingredients or other tangible personal property by railroad, pullman car, steamship, airline, or other transportation companies while operating in the State of Georgia or Georgia waters. The tax applies to food and food ingredients delivered to carriers in this State to be furnished complimentary to passengers regardless of where served.(2) Fraternities, sororities and other student societies, with members residing at a common location and jointly sharing household expenses, including food and food ingredients, are not considered to be selling at retail; and furnishing food and food ingredients to members is not taxable. Sales of food and food ingredients and other tangible personal property to these organizations are sales at retail and subject to the tax. Caterers or other persons selling food and food ingredients to fraternities and sororities are required to collect and remit the tax on the sales price thereof.(3) Retail sales of food and food ingredients by restaurants, hotels, clubs, cafes, caterers, boarding houses, and others are taxable. Cover, minimum and room service charges, and mandatory tips and gratuities are deemed a part of the sales price and are subject to the tax.(4) Food and food ingredients sold or provided without charge to employees. (a) Food and food ingredients sold to employees. 1. The sale of food and food ingredients by an employer to an employee is subject to Georgia sales tax on the total sales price charged to the employee. The following examples illustrate the application of Georgia sales and use tax to such transactions: (i) An employer allows an employee to purchase a $15.00 meal from the menu at a fifty percent (50%) discount. The employer is required to charge Georgia sales tax to the employee on $7.50.(ii) An employer provides a meal to an employee and declares $5.00 as a part of the employee's compensation. The employer is required to charge sales tax to the employee on $5.00.(b) Food and food ingredients provided without charge by employer. 1. Food and food ingredients provided by an employer without charge to an employee are taxable to the employer. The employer must remit use tax on the cost as shown in the employer's books and records. The following examples illustrate the application of sales and use tax to such transactions: (i) An employer provides a $15.00 meal off the menu at no charge to an employee. The employer is responsible for use tax on the cost price of the food purchased to prepare the meal.(ii) An employer provides a meal and beverage that is prepared especially for employees. The meal and beverage is provided at no charge to the employee. The employer paid Georgia sales tax on the items used to prepare the meal and beverage when purchased from the supplier. No additional tax is due from the employer on the items used to prepare the employee's meal and beverage.(iii) An employer allows an employee to have soft drinks during work hours without charge. The employer purchased the soft drinks under terms of resale. The employer will be responsible for use taxes on the cost price of all soft drinks provided to employees.2. In the event the exact cost of the employee's food and food ingredients is not represented in the employer's records, the cost shall be deemed to be fifty percent (50%) of the retail sales price of the food and food ingredients.Ga. Comp. R. & Regs. R. 560-12-2-.65
Ga. Code Ann. Secs. 48-2-7; 48-2-12; 48-8-3; 48-8-2; 92-3438a, 92-8405, 90-8406, 92-8409, 92-8427.
Original Rule entitled "Meals" adopted. F. and eff. June 30, 1965.Amended: F. Jan. 13, 1975; eff. Feb. 2, 1975.Amended: F. Mar. 15, 2012; eff. Apr. 4, 2012.