Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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T

550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603

Annotation 550.0195

(a) IN GENERAL—FACILITIES FOR CONSUMPTION

550.0195 Restaurant Sales on Separate Register—80/80 Rule. A business operates a fast food restaurant and also sells fresh fruit smoothies, which are nonalcoholic, noncarbonated fruit juice products sold on a "to-go" basis. Sales for these two operations are rung up on separate cash registers. Since the business equipment and employees operate out of the same business location and both are owned by the same restaurant company, the juice smoothies sales must be considered together with the meal sales to determine whether the 80/80 rule applies. If the fast food operations do not bring the smoothies sales within the 80/80 rule, the sale of the "smoothies" are exempt from tax when sold on a "take out" or "to-go" basis. If the business comes within the 80/80 rule and the company elects to separately account for sales of the "smoothies," the gross receipts from sales of the "smoothies" sold on a "take out" or "to-go" basis are exempt from tax as long as the separate accounting is fully documented in the company's records. 4/22/98. (M99–2).