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Ezel / Tax Rulings / CT
CT Ruling 90-7 Sales and Use Taxes 1990-01-30

Were employee meal charges and the corporation's subsidy payments to a corporate-cafeteria vendor subject to sales tax?

Short answer: The cafeteria's total gross receipts from meal charges to employees were taxable. The corporation's separate subsidy payments to the food vendor were not subject to sales tax.

Apply this to your situation

This page answers the general question as of 1990. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1990
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1990 Connecticut Department of Revenue Services Ruling addressing one corporate-cafeteria arrangement under the law and payment facts then in effect. The published text cites no statute and does not state that the ruling remains current; later legal changes or different employer/vendor billing can change the result, so another business should not assume it applies. Connecticut imposes sales and use tax solely at the state level: there are no local or municipal sales taxes. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

DRS separated the amounts paid in a corporate-cafeteria arrangement:

  • The cafeteria's total gross receipts from selling meals to company employees were subject to sales tax.
  • The corporation's subsidy payments to the food vendor were not subject to sales tax.

What this means for you

Under the ruling, the taxable meal sale was measured by what the cafeteria charged employees. The employer's distinct subsidy payment did not become additional taxable meal receipts.

Common questions

Were employee meal payments taxable? Yes.

Was the employer subsidy taxable? No under the ruling.

Citations and references

  • The published ruling cites no specific statute or regulation.

Source

Original ruling text

Ruling 90-7, Meals

Ruling 90-7

Meals

Please be advised that the total gross receipts for the sales of meals that the corporate cafeteria charges the company employees are subject to the sales tax.

The subsidized payments paid by a corporation to the food vendor are not subject to the sales tax.

LEGAL DIVISION

January 30, 1990

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