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Sales and Use Tax Changes Affecting the Restaurant Industry

2018 - 2019 NY State Budget Changes

May 31, 2018
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Restaurant and Hospitality Industry Sales and Use Tax Changes: 2018-2019 New York State Budget

The recently enacted New York State 2018-2019 budget has, among a great many things, made changes to the application of sales and use tax on the restaurant, catering and hospitality industry. The New York Department of Taxation and Finance issued New York Technical Service Bureau Memorandum TSB-M-18(1)S , 05/25/2018 summarizing these changes.

Historically, a business making purchases of taxable food and beverage from restaurants, caterers, and similar establishments was required to pay sales tax at the time of purchase, even when the goods were intended for resale. Upon resale of the food or beverages, the business would apply for a refund or credit of the sales tax paid on the original purchase.

Beginning June 1, 2018, sales of otherwise taxable food and beverages by restaurants, caterers, and similar establishments can be made for resale and not subject to sales tax. Form ST-120, Resale Certificate, has been updated to provide for purchases of restaurant-type food and beverages for resale.

Examples of food and beverages that can be sold for resale include:

  • cooked meat or vegetable dishes
  • cooked pasta dishes
  • cooked rotisserie chicken
  • deli or sandwich platters (such as cold cuts, subs, or burgers)
  • hot coffee
  • meals purchased from restaurants to be resold
  • pre-made sandwiches
  • soups
  • subcontracted catering services
  • vegetable platters

Should you need assistance with this or any tax issue related to your restaurant, catering, or hospitality business please reach out to us.