Tax information for retailers of prepared food

This information explains a change in the taxability of food items when sold by businesses that make eating utensils available to customers. A business must collect retail sales tax on all food item sales if its sales of “prepared foods” make up more than 75 percent of its annual sales of food and food ingredients.

Sellers may elect to collect sales tax on all sales, whether or not sales of prepared foods make up more than 75 percent of the seller’s annual sales of food and food ingredients.

Sales of “prepared food” are subject to sales tax. “Prepared food” is defined in detail in amended WAC 458–20–244 (Rule 244) but generally means heated foods, combined foods, or foods sold with utensils that are “provided by the seller.” In general, food is sold with utensils “provided by the seller” if:

• A utensil is physically given or handed to the buyer as part of the seller’s customary practice for the food item.
• A utensil (a plate, glass, cup, or bowl only) is necessary to receive the food.
• A utensil is made available by the seller and the seller’s percentage of prepared foods sales is greater than 75 percent.