Fast Food Restaurants' Purchases of Disposable Cutlery and Tableware Not Taxable

Wednesday, June 25th, 2014

 
 
Disposable cutlery laying on a picnic table.
Share
Link
Alabama
General

The Alabama Court of Civil Appeals recently ruled that a taxpayer that sold disposable cutlery and tableware to fast food restaurants did not have to collect sales tax.

The taxpayer sold straws, stirrers, napkins, moist towelettes, wood skewers, plastic utensils, and similar items to various fast food restaurants. The restaurants provided these items to their customers along with food or drink items.

Alabama taxes retail sales of tangible personal property. Retail sales do not include wholesale sales. Wholesale sales include sales to retailers for resale. Sales to retailers for consumption or use are not wholesale sales.

The Court ruled that because the fast food restaurants were retailers of prepared food, the taxpayer's sales were not subject to tax. The Court reasoned that the sale of prepared food included the sale of the disposable cutlery and tableware that went with the food. The taxpayer's sales were thus wholesale sales and not subject to tax.

https://acis.alabama.gov/displaydocs.cfm?no=585923&event=43H0KGL79


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Hot-Air Balloon Rides in Missouri are Taxable When...

Wednesday, June 19th, 2019 -Missouri recently released a letter ruling addressing the taxation of hot-air balloon rides. The taxpayer was ...

Nevada Exempts Certain Medical Equipment

Monday, June 17th, 2019 -Effective July 1, 2019, Nevada will exempt durable medical equipment, oxygen delivery equipment, and mobility ...

Participatory Sports are Taxable in New York

Friday, June 14th, 2019 -The New York Division of Tax Appeals recently denied a refund claim made by an instructor-led indoor spin clas...

Marketplace Facilitators to Collect Tax in Vermont

Thursday, June 13th, 2019 -Vermont recently passed a bill requiring marketplace facilitators to collect and remit sales tax on retail sal...

Agricultural Rotary Cutter Taxable in Arkansas

Wednesday, June 5th, 2019 -The Arkansas Department of Finance and Administration (DFA) recently determined that a rotary cutter used in t...

Wholesale Exemption Applies to Meals Purchased by...

Monday, June 3rd, 2019 -The Colorado Supreme Court recently ruled that a food service vendor made exempt wholesale sales of food and f...