Which food and beverage sales by a deli are subject to sales tax?

Delicatessens offer a variety of food and beverages for sale. Some foods are “prepared food” such as sandwiches, soups, or salads and are generally subject to sales tax. However, nontaxable grocery type foods such as canned or prepackaged food, baked goods, and meats and cheeses are also sold by delis.

If the deli properly segregates taxable and nontaxable sales the deli needs only to collect sales tax on sales of prepared food and soft drinks.

Taxable food and beverages sold by a deli include:

• Any food or beverage sold with or in a cup, plate, napkin, fork, spoon, bowl, etc.
• Any food or beverage sold hot, except bakery items
• Any food or beverage where the seller has combined two or more ingredients – unless:
  • The seller merely cut, repackaged, or pasteurized the food items (sliced meats and cheeses).
  • The seller sells the item unheated and by weight or volume as a single item (salads).
  • The food is raw meat, fish, poultry, or eggs, or contains any of these raw ingredients and recommended by the FDA to be cooked.
    

Tax exempt food and beverages include:

• Fresh fruit/vegetables
• Bakery items sold without a utensil
• Bottled water
• Other bottled or canned beverages containing over 50 percent fruit or vegetable juice, or milk, milk product, or milk substitute
• Canned goods
• Prepackaged food (packaged by the manufacturer)

King County Food and Beverage Tax

Sales of taxable foods and beverages by delicatessens in King County are subject to the stadium tax (King County food and beverage tax).

Businesses making sales through mobile sales units such as catering trucks or sidewalk vendors of food or beverage items are not required to collect the additional stadium tax.

References: RCW 82.08.0293 and WAC 458-20-244