X hits on this document

161 views

0 shares

0 downloads

0 comments

22 / 58

Publication 220

The following examples illustrate how to de- termine whether an item is “prepared food.” All of the answers presume that the item is not subject to tax as candy, a dietary sup- plement, or a soft drink.

Example 1 - Donut “To Go” – Not Pre- pared Food: Bakery sells one donut “to go” for $0.75 to Customer. Bakery’s sales of prepared food, as determined in Part II.D.4.(b) on pages 13 to 14, are 75% or less of all of its sales of food and food in- gredients. Bakery’s customary practice when it sells donuts “to go” is to sell the donuts without physically giving or handing nap- kins or other utensils to the customer. Plates, bowls, glasses, or cups are not necessary for the customer to receive the donut. Although the donut was made by Bakery, it does not meet the definition of prepared food provid-

ed

in

Part II.D.

because

(1) it

on

is

not pages 10 sold through , heated, 14

(2) Bakery’s customary practice is not to physically give or hand utensils to its cus- tomers with donuts that are sold “to go,” (3) plates, bowls, glasses, or cups are not necessary for the customer to receive the donut; and (4) Bakery’s sales of prepared food, as determined in Part II.D.4.(b) on pages 13 to 14, are 75% or less of all of its sales of food and food ingredients. Since the donut does not meet the definition of pre- pared food, the sale of the donut is not subject to Wisconsin sales or use tax, regard- less of whether Bakery makes utensils available to its customers.

Example 2 - Donut and Coffee “To Go”: Same as Example 1, except that Bakery also sells a hot cup of coffee for $1.00 to Cus- tomer along with the donut. The sale of the donut is not subject to tax as explained in Example 1. The hot coffee is prepared food and the sale of it is subject to Wisconsin sales or use tax.

Example 3 - Donut and Coffee Eaten at Bakery – Prepared Food: Same as Exam- ple 1, except that the donut is sold to be eaten at the bakery. Bakery’s customary

22

practice when selling donuts to be eaten at its bakery is to physically give or hand its customers a napkin along with the donuts purchased. The sale of the donut and hot coffee are subject to Wisconsin sales or use tax because they meet the definition of pre- pared food. The coffee meets the definition of prepared food because it is sold heated. The donut meets the definition of prepared food, because Bakery’s customary practice when it sells donuts to be eaten at the bakery is to physically give or hand its customer a napkin or other utensil along with the donut.

Example 4 - Donut “To Go” - Prepared Food: Bakery sells one donut “to go” for $0.75 to Customer. Bakery’s sales of pre- pared food, as determined in Part II.D.4.(b) on pages 13 to 14, are 75% or less of all of its sales of food and food ingredients. Bak- ery’s customary practice when it sells donuts “to go” is to physically give or hand napkins or other utensils to its customers with the donuts. Plates, bowls, glasses, or cups are not necessary for the customer to receive the donut. Since Bakery’s customary practice when it sells donuts “to go” is to hand its customers napkins along with the donuts, Bakery’s sale of the donut to Customer is the sale of prepared food and subject to Wiscon- sin sales or use tax. The sale to Customer is subject to tax even if Customer does not re- ceive a napkin along with the donut, since Bakery’s customary practice when it sells donuts “to go” is to physically give or hand its customers napkins or other utensils.

Example 5 - Donut and Coffee Eaten at Bakery: Same as Example 4, except that the donut is sold to be eaten at the bakery and Bakery sells a cup of hot coffee for $1.00 to Customer along with the donut. Bakery’s customary practice when selling donuts to be eaten at its bakery is to sell the donuts to its customers without physically giving or handing them napkins or other utensils along with the donuts purchased. However, nap- kins and other utensils are made available to customers. The hot coffee is prepared food and the sale of it is subject to Wisconsin

Document info
Document views161
Page views161
Page last viewedSat Dec 03 12:50:37 UTC 2016
Pages58
Paragraphs2054
Words29558

Comments