Alabama Amends Rule on Restaurant Purchases

Friday, February 6th, 2015

A table in a restaurant.

The Alabama Department of Revenue ("Department") has amended the rule for non-taxable restaurant purchases to conform with recent case law.

Effective March 5, 2015, the Department has amended Rule 810-6-1-.69 - Containers, Components of Containers, Labels, Pallets, and Shipping Supplies. Last June, the Alabama Court of Appeals ruled that critical elements of food and drink items sold by fast-food restaurants were nontaxable sales by wholesalers. Critical elements included straws, stirrers, napkins, moist towelettes, wood skewers, and plastic utensils that were sold as part of a sale of food or drink and were not reusable.

Effective March 5, 2015, the rule will state that items purchased by food and beverage servers are non-taxable if the items purchased are (1) later sold in connection with a sale of food or drink and (2) not reusable. For example, coffee stirrers and napkins that will be sold with cups of coffee are non-taxable when purchased by the restaurant.

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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 or call 866.578.8193.

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