Tax Alert: Sales Tax Change for NY Restaurants & Caterers

The recently enacted New York State 2018-2019 budget has brought about much change, including the application of sales and use tax on the restaurant, catering and hospitality industry.  New York is evidently seeking ways to simplify and streamline processes for business owners, and not subjecting materials used by restaurants and caterers to sales tax is one of them.

New York restaurants and caterers that resell heated food and beverages, or restaurant style food (in a form ready to be eaten) can accept a newly revised Resale Certificate.  Revised form ST-120 is effective June 1, 2018 and has a new section entitled “Restaurant-type food, heated food, or heated drink for resale” in Part 1 section C.

Here is a link to the revised ST-120 form and its instructions:

Previously, sales tax would have been paid on these items and the purchaser would have to file a refund claim when the meals were resold. New York restaurants and caterers accepting these certificates should make sure the form is fully completed, accepted in good faith and in their possession within 90 days of the sale. One blanket certificate can be accepted for multiple transactions from the same business. Examples of items that can be purchased for resale include cooked meats, vegetable dishes, hot coffee, sandwiches, soups, etc.

If you would like to learn more about this matter, please contact Peggy Tilles at [email protected].

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