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(4) A hotel is required to pay sales tax on its purchase
of taxable items (e.g., prepared food purchased from a caterer, soft
drinks, candy, ice) provided to guests free of charge as complimentary
items. However, a hotel is not required to accrue and pay sales tax
on its purchase of exempt food products (loaves of bread, milk, cereal,
fruit) even if provided to guests as free complimentary items.
(k) Caterers.
(1) Caterers are persons engaged in the business of
preparing and serving meals, drinks, or other food products at locations
designated by customers. A caterer is a seller of prepared food and
beverages and must collect sales tax on all charges billed in connection
with the sale of taxable meals.
(2) A caterer owes tax on the purchase, lease, or rental
of such items as tables, chairs, tablecloths, steam tables, and table
decorations used in providing catered meals. A caterer may claim a
resale exemption on the purchase of nonreusable items transferred
to customers and a manufacturing exemption on qualifying equipment,
such as mixers, used to prepare the food. See §3.300 of this
title for information on qualifying equipment.
(3) If a caterer uses a room or facility in a hotel
that is subject to hotel occupancy tax, the caterer is required to
pay the occupancy tax to the hotel. There is no resale exemption for
hotel occupancy tax. In addition, a caterer must collect sales tax
on a separately stated charge passed on to the customer for the cost
or expense of the room (including the occupancy tax) when billed to
a customer as part of the taxable sale of catered meals.
(l) For information on the responsibilities of persons
who sell and serve mixed alcoholic beverages, see §3.289 of this
title (relating to Alcoholic Beverage Exemptions).
(m) Grocery stores and convenience stores. Subject
to the exemptions described in subsection (b) of this section, grocery
stores and convenience stores should collect sales tax on the items
listed in subsection (c) of this section. Taxable items include ice,
candy, packaged soft drinks, and prepared food. Food and drinks sold
in a heated state, fountain drinks, and food sold with eating utensils
are considered to be prepared food ready for immediate consumption
regardless of the location in the store from which the food is sold.
Other food or drinks that can be immediately consumed and that are
sold by a restaurant, lunch counter, deli, or other similar location
within the store are also considered to be taxable prepared food.
For example, a bottle of unsweetened iced tea sold at a grocery store
deli is considered to be ready for immediate consumption and is taxable.
However, a bottle of unsweetened iced tea sold at the checkout lane
of a grocery store is not considered to be food ready for immediate
consumption and is not taxable.
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| Source Note: The provisions of this §3.293 adopted to be effective September 18, 2006, 31 TexReg 8002; amended to be effective June 5, 2017, 42 TexReg 2938; amended to be effective December 18, 2018, 43 TexReg 8141 |
