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 550.0343

(b) RESTAURANTS, HOTELS AND BOARDING HOUSES

550.0343 Dinner Theater. Generally, when a taxpayer provides a nontaxable service and tangible personal property in the same retail transaction, the taxpayer will not be allowed to allocate all of its profit to the nontaxable portion of the transaction. In the case of a dinner theater offering dinner and a show for a single price, the Board ruled that the single amount should be allocated on the same basis as an American plan hotel pursuant to Regulation 1603 which says that "a reasonable segregation must be made." While a reasonable segregation is a matter of judgment, the segregation of proceeds should result in a taxable amount at least sufficient to cover the retailer's cost of food, operating expenses and a mark-up. 7/19/85.