Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603
(b) RESTAURANTS, HOTELS AND BOARDING HOUSES
550.0340 Dinner Club Membership. A membership entitling the member to a free meal at a given restaurant provided he purchases a meal of equal value is sold by a promoter for $12, $10 of which is retained by him and $2 turned over to the restaurant. The $10 is not subject to tax but the $2 becomes part of the restaurant owner's gross receipts. Tax should be charged by the restaurant only upon the price of the meal paid for by the member, but if the restaurant charges tax on the price of the free meal it must pay such excessive reimbursement over to the state. 11/27/62.