Ga. Comp. R. & Regs. R. 560-12-2-.104 - Food Exemption
(1)
Sales of food and food ingredients qualify for an exemption from sales and use
tax as provided herein.
(2)
Definitions.
(a) "Alcoholic Beverages" means
beverages that are suitable for human consumption and contain one-half of one
percent or more of alcohol by volume.
(b) "Dietary supplement" means any product,
other than tobacco, intended to supplement the diet that:
1. Contains one or more of the following
dietary ingredients: a vitamin, mineral, herb or other botanical, amino acid, a
dietary substance for use by humans to supplement the diet by increasing the
total dietary intake, or a concentrate, metabolite, constituent, extract, or
combination of any ingredient described above; and
2. Is intended for ingestion in tablet,
capsule, powder, softgel, gelcap, or liquid form, or if not intended for
ingestion in such a form, is not represented as conventional food and is not
represented for use as a sole item of a meal or of the diet; and
3. Is required to be labeled as a dietary
supplement, identifiable by the "Supplemental Facts" box found on the label and
as required pursuant to
21 C.F.R. §
101.36.
(c) "Eating utensils" includes plates,
knives, forks, spoons, glasses, cups, napkins and straws, but does not include
other containers or packaging used to transport the food.
(d) "Food and food ingredients" means
substances, whether in liquid, concentrated, solid, frozen, dried, or
dehydrated form, that are sold for ingestion or chewing by humans and are
consumed for their taste or nutritional value. "Food and food ingredients"
shall not include alcoholic beverages, dietary supplements, or
tobacco.
(e) "Natural person" means
an individual human being.
(f)
"Prepared food", which is subject to both state and local sales and use taxes,
means:
1. Food sold in a heated state or
heated by the seller at the seller's location (i.e., the place where the sale
takes place). This includes food that was heated by the seller at any time
before the sale even if the item is in an unheated state at the time of sale;
or
2. Food with two or more food
ingredients mixed or combined at the seller's location by the seller for sale
as a single item; or
3. Food sold
with eating utensils provided by the seller. Food shall be considered to be
sold with eating utensils provided by the seller when the food is customarily
intended for consumption with the utensils provided. The presence of
self-service utensils in a facility does not make otherwise exempt food taxable
unless it is customarily intended that the food be consumed with those
utensils.
(g) "Tobacco"
means cigarettes, cigars, chewing or pipe tobacco, or any other item that
includes tobacco.
(3)
Food Exemptions.
(a) O.C.G.A. §
48-8-3(57)
exemption. Effective for transactions occurring on or after January 1, 2011,
food and food ingredients sold to natural persons for consumption off premises
are not subject to state sales and use tax, but are subject to any local sales
and use tax.
1. The state sales and use tax
exemption for food and food ingredients is not available to businesses
including but not limited to corporations, partnerships, limited liability
companies, and sole proprietorships. Unless another exemption applies, business
entities, including nonprofit organizations, must pay both state and local
sales and use tax on all purchases of food and food ingredients.
2. For purposes of the exemption for food and
food ingredients contained in O.C.G.A. §
48-8-3(57), "food
and food ingredients" does not include the following:
(i) Prepared food;
(ii) Items ingested or chewed primarily for
medical or hygiene purposes, such as cough drops, throat lozenges, breath
strips, and over the counter medications;
(iii) Alcoholic beverages;
(iv) Tobacco and tobacco products;
(v) Dietary supplements; and
(vi) Food intended for non-human consumption,
such as dog food, cat food and animal feed.
(b) O.C.G.A. §
48-8-3(53)
exemption. Food and food ingredients purchased with food stamps is exempt after
January 1, 2011 to the same extent that it was exempt before January 1,
2011.
(c) O.C.G.A. §
48-8-3(12)
exemption. Food and food ingredients, including prepared food, sold and served
to pupils and employees of public schools as part of a school lunch program are
exempt from state and local sales tax.
(d) O.C.G.A. §
48-8-3(13)
exemption. Sales of food and food ingredients, including prepared food,
consumed by pupils and employees of bona fide private elementary and secondary
schools, which have been approved by the Internal Revenue Service as
organizations eligible to receive tax deductible contributions, are exempt from
state and local sales tax when application for exemption is made to the
Department and proof of the exemption is established.
(e) O.C.G.A. §
48-8-3(59)
exemption.
(i) Sales of food and food
ingredients to and by member councils of the Girl Scouts of the U.S.A. in
connection with fundraising activities of any such council are exempt from
state and local sales tax.
(ii)
Sales of food and food ingredients to and by member councils of the Boy Scouts
of America in connection with fundraising activities of any such council are
exempt from state and local sales tax.
(f) O.C.G.A. §
48-8-3(81)
exemption. The sale of food and food ingredients to a qualifying airline for
service to passengers and crew in the aircraft is exempt from state and local
sales tax, whether in flight or on the ground; and the furnishing without
charge of food and food ingredients to qualifying airline passengers and crew
in the aircraft, whether in flight or on the ground. "Qualifying airline" is
defined in O.C.G.A. §
48-8-3(81).
(4)Examples of the food exemption
in O.C.G.A. §
48-8-3(57).
(a) Food and food ingredients that are exempt
from state sales and use tax include:
1. Most
prepackaged or repackaged items sold for ingestion by humans for taste or
nutritional value, such as prepackaged boxed cereal, cartons of milk, peanut
butter ground in the store by either the seller or the customer,
candy;
2. Food that is only cut,
repackaged, or pasteurized by the seller, such as:
(i) Deli meat sliced by the seller and sold
by weight; and
(ii) Potato salad
purchased in bulk by the seller and sold to customers by weight or volume as
long as the seller does not add any ingredients to the potato salad;
3. Raw animal foods such as eggs,
fish, meat, poultry, and foods comprised of these raw animal foods, that
require cooking by the consumer;
4.
Packaged beverages of all kinds, including bottled water;
5. Liquids such as cooking wine and vanilla
extract used in cooking that exceed an alcohol content of 0.5% but are not
intended for sale as a beverage (drinkable liquid);
6. Food sold without eating utensils by a
seller whose proper primary North American Industrial Classification System
(NAICS) code is subsector 311 (food manufacturing) except industry group 3118
(bakeries and tortilla manufacturing); and
7. Prepackaged food sold from vending
machines.
(b) Food and
food ingredients that are not exempt and are subject to both state and local
sales and use tax include:
1. Business
purchases and uses of food and food ingredients.
(i) A business purchases frozen turkeys to
give to employees as holiday gifts. The purchase of such turkeys is subject to
both state and local sales and use tax because the purchaser is a business
entity, and not an individual human being, making a purchase for off-premises
consumption. Food purchases by a sole proprietorship are considered to be
purchases by a business that are subject to both state and local sales tax. If
the business does not pay state sales tax at the time of purchase, the business
should accrue and remit state use tax on its purchase of the food
items.
(ii) Water in bottles,
coolers, or other containers purchased by a business that provides the water
for no charge to its employees or customers is subject to both state and local
sales and use tax.
(iii) A daycare
center or for-profit nursing home purchases food at a grocery store to use in
providing its service. Daycare centers and nursing homes are not natural
persons and thus the exemption in O.C.G.A. §
48-8-3(57)
does not apply to their purchases. The purchases are subject to both state and
local tax; and if the day care center or for-profit nursing home only pays
local tax at the time of purchase, it should accrue and remit state use tax on
the purchase.
2. Food
and food ingredients sold for on-premises consumption, such as prepackaged
candy sold at movie theaters and sports arenas.
(c) Prepared food, which is not exempt and is
subject to both state and local sales and use tax, generally includes:
1. Food sold by restaurants, street food
vendors, food carts, and fast food establishments;
2. Popcorn and fountain beverages sold by
movie theaters because the popcorn is heated onsite and the fountain beverages
are made by mixing ingredients;
3.
Cakes, breads and pastries made by a retail bakery onsite and sold with or
without utensils for off-premises consumption;
4. Bread heated or baked by the seller at the
seller's location, even though the dough was made off-site;
5. Food with two or more food ingredients
mixed or combined at the seller's location by the seller for sale as a single
item, such as:
(i) Potato salad purchased in
bulk by the seller to which the seller adds an ingredient, such as salt or
pepper, and then sells by weight or volume; and
(ii) Deli sandwiches made by the seller at
the seller's location;
6. Prepackaged food sold with a utensil such
as yogurt sold by a coffee shop with a spoon for off-premises consumption;
and
7. Heated food sold by a
vending machine, such as coffee.
Notes
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