Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
300.0000 HOSPITALS, INSTITUTIONS AND HOMES FOR THE CARE OF PERSONS—Regulation 1503
300.0008 Child Care and Housing Facility. A food service company was engaged to provide meals at a state child care and housing facility where children, faculty and staff receive meals free of charge.
Assuming the state child care and housing facility qualifies as an "institution" under Regulation 1503(a), the sales of meals and food products which are furnished to the children, faculty, and staff who reside at the facility are exempt from tax. Under Regulation 1603(m), the exemption for meals applies only to meals furnished to residents of the institution. Staff who reside in the facility as part of their jobs qualify as "residents."
On the other hand, the food service company is the retailer of meals which it serves and the facility is the consumer of the meals, food and drinks which are furnished free of charge to non-resident children, faculty and staff. Accordingly, the food service company must report and pay tax on the sales of such meals to the facility. 1/24/92.