Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603
550.0848 Preparing Food for People in their Homes. A private chef makes a living by preparing food for people in their homes. Usually, the chef's clients have already purchased the food. However, occasionally the chef purchases the food for them and obtains reimbursement for the actual amount. The chef gets paid by the hour for his labor. The customers are billed for the chef's time for travel, shopping, cooking, and on rare occasions, serving the food. All the food is prepared and eaten by the clients in their home. The chef pays his own federal, social security, and state taxes. A person is not an employee solely because he is hired by the hour or day. In an employment relationship, the employer withholds and pays social security and federal and state income taxes. If the employer withholds, then the Board generally considers the relationship to be an employment relationship if other aspects of the relationship are not inconsistent with such a conclusion. On the other hand, if the individuals treat the arrangement as the hiring of an independent contractor without withholding, the Board generally accepts their apparent view of the relationship. Here, since the chef pays his own federal, social security, and state taxes, he is considered an independent contractor. Therefore, the chef is a caterer under Regulation 1603(h) and all of his charges are taxable including those for reimbursement of the cost of foods. 6/25/96.