Pre-Packaged Salads Are Subject to Tax in Massachusetts

Monday, February 20th, 2012

 
 
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The Massachusetts Department of Revenue (DOR) recently issued a letter ruling discussing the taxability of pre-packaged salads sold in grocery stores (Mass. Ltr. Rul. No. 12-2 (Dept. of Revenue Feb. 8, 2012)). Massachusetts generally exempts sales of food products from sales tax. But, in contrast, Massachusetts taxes "meals" sold by restaurants. "Meals" are defined as "any food or beverages or both, prepared for human consumption and provided by a restaurant, where the food or beverage is intended for consumption on or off the restaurant premises, and includes food or beverages sold on a 'take out' or 'to go' basis, whether or not they are packaged or wrapped and whether or not they are taken from the premises of the restaurant." While grocery stores are not typically classified as restaurants, the DOR determined that "salads sold as a unit in a manner reasonably and commonly considered a meal such as on a plate or otherwise packaged as a meal," will be subject to tax as a "meal." In reaching this conclusion, the DOR reasoned that the pre-packaged salads constitute a "combination plate sold as a unit reasonably and commonly considered a meal."

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