Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603

Annotation 550.0824


550.0824 80/80 Rule. A caterer has gross receipts which are over 80% from the sale of food products and more than 80% of those sales are subject to tax. The caterer has no on-site eating facilities such as tables and chairs.

Regulation 1603 limits the 80/80 rule to "restaurants, fast-food establishments, concessionaires, soda fountains, and other similar establishments." A caterer with no on-site eating facilities is not subject to the 80/80 rule. Thus, sales of cold food "to go" by the caterer are not subject to tax. (Under certain circumstances, a person who does not own on-site eating facilities is nevertheless regarded as having on-site eating facilities, e.g., when the person operates in a shopping mall that offers shared eating facilities for a number of food vendors.) 9/15/87.