12 CSR 10-110.990 - Tax-Sales of Food
PURPOSE: Section 144.014, RSMo provides for a reduced tax rate for certain sales of food. This rule explains when the reduced rate applies.
(1) In general, qualified sales of food by a
qualified business are taxed at a reduced state rate of 1.225% plus any
applicable local tax. All other sales of food are taxed at the full state rate
of 4.225% plus any applicable local tax.
(2) Basic Application of Rule.
(A) Sales of food subject to the reduced rate
include food that qualifies under the Federal Food Stamp Program. This includes
food or food products for home consumption and seeds and plants for use in
gardens to produce foods for personal consumption. Alcoholic beverages, tobacco
and hot food items ready for immediate consumption do not qualify for the
reduced rate. Food items refrigerated or at room temperature qualify for the
reduced rate, even if the purchaser elects to heat the item on the business'
premises. Bakery items, even if still warm from baking, are qualified
foods.
(B) A business whose gross
receipts from sales of food and drink prepared by the business for immediate
consumption, either on or off premises, are 80% or less of its total gross
receipts must remit tax on its qualifying food sales at a reduced state tax
rate of 1.225% plus any applicable local tax.
(C) Sales of qualifying food through vending
machines are subject to the reduced tax rate.
(3) Examples.
(A) A grocery store sells nonfood items and
qualifying food items. The store will charge the regular tax rate on the
nonfood items and the reduced tax rate on the qualifying food items.
(B) A vending machine company provides two
vending machines to a business. One machine is for cold items and one machine
keeps items hot. Only the cold items are eligible for the reduced tax rate. The
hot items are subject to the regular tax rate.
(C) A convenience store sells burritos from
its freezer. The convenience store provides a microwave so the purchaser can
heat it. The sale of the burrito is taxed at the reduced rate because it is a
qualifying food item.
(D) A vending
machine company sells popcorn and soup in microwave pouches and containers.
These items are sold at room temperature and are heated by the purchaser in a
microwave provided in the vending area. These items are eligible for the
reduced tax rate.
(E) A fast food
restaurant sells cold salads and cold soft drinks. These cold items represent
approximately 10% of total gross receipts. Because the restaurant's total food
sales of items prepared for immediate consumption are more than 80% of the
total sales, the restaurant should charge the regular tax rate on all its food
sales.
(F) A convenience store
sells prepared cold sub sandwiches, ice cream and cold drinks. The store also
prepares and sells hot dogs and chili. All items are sold "to go." The store
should charge the reduced tax rate on the cold items, but should charge the
regular tax rate on the hot items.
(G) A company sells pre-packaged ice cream
bars made by an unrelated ice cream manufacturer to neighborhood families from
trucks. The ice cream truck driver should charge the reduced rate of tax
because the seller does not prepare the ice cream bars and are not consumed on
the premises of the seller.
(H) An
ice cream vendor sells soft cones and pre-packaged ice cream bars made by an
unrelated ice cream manufacturer at a football game. The gross receipts from
the sales of soft cones are less than 80% of the ice cream vendor's total gross
receipts. None of the ice cream qualifies for the reduced rate because it is
consumed on the premises.
Notes
*Original authority: 144.270, RSMo 1939, amended 1941, 1943, 1945, 1947, 1955, 1961.
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PURPOSE: Section 144.014, RSMo provides for a reduced tax rate for certain sales of food. This rule explains when the reduced rate applies.
(1) In general, qualified sales of food by a qualified business are taxed at a reduced state rate of 1.225% plus any applicable local tax. All other sales of food are taxed at the full state rate of 4.225% plus any applicable local tax.
(2) Basic Application of Rule.
(A) Sales of food subject to the reduced rate include food that qualifies under the Federal Food Stamp Program. This includes food or food products for home consumption and seeds and plants for use in gardens to produce foods for personal consumption. Alcoholic beverages, tobacco and hot food items ready for immediate consumption do not qualify for the reduced rate. Food items refrigerated or at room temperature qualify for the reduced rate, even if the purchaser elects to heat the item on the business' premises. Bakery items, even if still warm from baking, are qualified foods.
(B) A business whose gross receipts from sales of food and drink prepared by the business for immediate consumption, either on or off premises, are 80% or less of its total gross receipts must remit tax on its qualifying food sales at a reduced state tax rate of 1.225% plus any applicable local tax.
(C) Sales of qualifying food through vending machines are subject to the reduced tax rate.
(3) Examples.
(A) A grocery store sells nonfood items and qualifying food items. The store will charge the regular tax rate on the nonfood items and the reduced tax rate on the qualifying food items.
(B) A vending machine company provides two vending machines to a business. One machine is for cold items and one machine keeps items hot. Only the cold items are eligible for the reduced tax rate. The hot items are subject to the regular tax rate.
(C) A convenience store sells burritos from its freezer. The convenience store provides a microwave so the purchaser can heat it. The sale of the burrito is taxed at the reduced rate because it is a qualifying food item.
(D) A vending machine company sells popcorn and soup in microwave pouches and containers. These items are sold at room temperature and are heated by the purchaser in a microwave provided in the vending area. These items are eligible for the reduced tax rate.
(E) A fast food restaurant sells cold salads and cold soft drinks. These cold items represent approximately 10% of total gross receipts. Because the restaurant's total food sales of items prepared for immediate consumption are more than 80% of the total sales, the restaurant should charge the regular tax rate on all its food sales.
(F) A convenience store sells prepared cold sub sandwiches, ice cream and cold drinks. The store also prepares and sells hot dogs and chili. All items are sold "to go." The store should charge the reduced tax rate on the cold items, but should charge the regular tax rate on the hot items.
(G) A company sells pre-packaged ice cream bars made by an unrelated ice cream manufacturer to neighborhood families from trucks. The ice cream truck driver should charge the reduced rate of tax because the seller does not prepare the ice cream bars and are not consumed on the premises of the seller.
(H) An ice cream vendor sells soft cones and pre-packaged ice cream bars made by an unrelated ice cream manufacturer at a football game. The gross receipts from the sales of soft cones are less than 80% of the ice cream vendor's total gross receipts. None of the ice cream qualifies for the reduced rate because it is consumed on the premises.
Notes
*Original authority: 144.270, RSMo 1939, amended 1941, 1943, 1945, 1947, 1955, 1961.