Which of a meat market's prepared foods are taxable, and which are exempt off-premises food-store sales?

Plain-English summary

Joseph O. Cobb, d/b/a Cobbs House of Meats, sells a range of prepared foods, none sold hot: baked stuffed potatoes (prepared and frozen), quiche made on premises, TV-style dinners, cold soups that can be reheated at home, stir-fry-style foods, cold salads, and cold-cut, cheese, vegetable and fruit platters. He asked which are subject to sales tax.

The answer splits: the platters are taxable; the rest depend on how they're sold.

• The rule. Section 1105(d) taxes prepared food and drink, but excludes food sold for consumption off the premises where it is (A) sold unheated and (B) of a type commonly sold for off-premises consumption in food stores, in the same form, condition, quantities and packaging those stores use. 20 NYCRR 527.8 fills this in: whether food is "heated" turns on the vendor's merchandising (warming units/cook-to-order = heated; sold at or below room temperature = unheated), and unheated food is taxable when arranged on plates or platters as servings, but not taxable when sold in bulk by weight, dozen or volume.
• Most items are a factual question. The baked potatoes, quiche, TV dinners, soup, stir-fry foods and salads are exempt only if Cobb can establish, for each item, that it is (1) sold for off-premises consumption, (2) sold unheated, (3) of a type commonly sold off-premises by food stores, and (4) sold in the same form, condition, quantities and packaging as those stores. That's a question of fact an advisory opinion can't decide — taxability depends "not only on what is sold but how," including quantity and packaging.
• The platters are taxable. The cold-cut, cheese, vegetable and fruit platters are subject to tax, because food arranged on platters as servings falls within 20 NYCRR 527.8(e)(2)(ii) and Example 4 (a store arranging cold cuts on platters, charged by the pound, makes taxable sales).

What this means for you

"Cold" isn't enough — packaging decides it. New York's off-premises food exemption asks not just whether food is unheated but whether you sell it the way a grocery would: in bulk by weight, the dozen or volume. The same cold cuts are exempt sold by the pound from the case, but taxable once you arrange them on a platter as servings. How you present and price it can flip the result.

Arranged platters are a reliable tax trigger. Cold-cut, cheese, vegetable and fruit platters — food plated as individual or multiple servings — are taxable, even when you charge by the pound. If you offer platters, plan to collect tax on them.

Item-by-item facts govern the rest. For prepared foods like stuffed potatoes, quiche or dinners, whether they're exempt turns on all four conditions for each item, which the Department won't resolve in the abstract. Keep your merchandising (temperature, form, quantity, packaging) consistent with true food-store bulk sales if you're treating an item as exempt, and document it.

Common questions

Q: I sell everything cold — is it all exempt?
A: Not necessarily. Unheated is only one condition. The food must also be a type commonly sold off-premises by food stores and sold in the same form, condition, quantities and packaging. Cold food arranged as servings on a platter is taxable even though it's unheated.

Q: Are my cold-cut and cheese platters taxable?
A: Yes. Food arranged on platters as servings is taxable under the regulation, even if you charge by the pound. That's how the Department treated Cobb's platters.

Q: Why couldn't the Department just tell me if my quiche and dinners are taxable?
A: Because it depends on facts — how each item is sold (unheated, food-store form, quantity, packaging) — which an advisory opinion can't resolve. It can only state the rule and leave the item-by-item determination to the facts.

Citations and references

Statute and regulation:

• Tax Law § 1105(d) — taxes food and drink sold by restaurants and other establishments, with an exclusion for unheated food commonly sold off-premises by food stores in the same form, quantities and packaging
• 20 NYCRR 527.8 — heated vs. unheated (by merchandising method); food-store form/condition/quantity/packaging rules; bulk sales exempt, servings on plates/platters taxable (527.8(e)(2)(ii), Example 4)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1986.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a86_19s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-86(19)S
Sales Tax
May 15, 1986

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S860124A

On January 24, 1986 a Petition for Advisory was received from Joseph O. Cobb d/b/a Cobbs
House of Meats, 1758 Rte 9, Clifton Park, New York 12065.
The issue is whether Petitioner's sale of certain prepared foods are subject to tax.
Petitioner sells baked stuffed potatoes that are prepared and frozen; quiche made on the
premises but not sold hot; prepared foods such as T.V. dinners made on premises that are not sold
hot; cold soups that may be heated at home; stir-fry style foods not sold hot; cold salads, cold cut
platters, cheese platters, vegetable and fruit platters.
Section 1105(d) of the Tax Law imposes a tax on the receipts from "... every sale of food and
drink ... when sold in or by restaurants, taverns or other establishments ....

(3) in those instances where the sale is for consumption off the premises of the vendor, except
where food (other than sandwiches) or drink or both are (A) sold in an unheated state and, (B) are
of a type commonly sold for consumption off the premises and in the same form and condition,
quantities and packaging, in establishments which are food stores other than those principally
engaged in selling foods prepared and ready to be eaten."
Sales and Use Tax Regulation Section 527.8 further explains the above section of the Tax
Law as follows:
"(d) Consumption on premises. The phrase 'for consumption on the premises' shall mean that
the food or drink sold may be consumed on the premises where the vendor conducts his business.
(e) Consumption off premises. The phrase 'for consumption off the premises' shall mean that
the food, including sandwiches, or drink is intended to be consumed at a place away from the
vendor's premises.
(1) Food or drink in a heated or unheated state. The determination of when food or
drink is sold either in a heated or unheated state must be made according to the vendor's
method of merchandising.
(i) If the vendor attempts to maintain the food at a temperature which is
warmer than the surrounding air temperature by using heating lamps, warming trays,

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

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TSB-A-86(19)S
Sales Tax
May 15, 1986

ovens or similar units, or cooks to order, the vendor is selling food in a heated state.
(ii) If the vendor sells prepared foods from units maintained at or below
surrounding air temperature, such sales are sales of prepared food in an unheated
state.
Example 1:

A supermarket sells barbecued chicken hot from a rotisserie to be
taken home and eaten. This is a taxable sale of heated food.

Example 2:

A food store sells potato salad by the pound and also sells hot
pastrami by the pound for home consumption. The potato salad is not
taxable but the pastrami is subject to tax.

(2) Form, condition, quantity and packaging sold in food stores. (i) The term food
stores shall mean any establishment which is principally engaged in selling food or
drink which is not prepared and ready to be eaten. Supermarkets, grocery stores, fish
markets, produce markets, bakeries and meat markets are examples of the types of
establishments considered to be food stores. When a department within food stores
makes sales of food or drink which are subject to tax, it must collect the tax.
(ii) Food sold in an unheated state is taxable when sold as sandwiches or
meals ready to be eaten when arranged on plates or platters as individual or multiple
servings regardless of how the sales price is arrived at (pound v. serving).
(iii) Food sold in an unheated state is not subject to tax when commonly sold
in food stores in bulk by weight, by the dozen (or part thereof) or by volume (gallon,
quart, etc.) for off premises consumption.
(iv) Sales of heated and unheated food in combination on plates or as dinners
are subject to tax on the total charge.
Example 3:

Cold cuts, salads and bakery products are sold by a restaurant for
home consumption. The restaurant charges its customer by the pound
for the cold cuts and salad and by the dozen or loaf for the bakery
products. Such sales are not taxable.

Example 4:

A supermarket sells and arranges cold cuts on platters for customers.
The customer is charged by the pound for the cold cuts. Sales of this
type are taxable.

Example 5:

Sandwiches sold through vending machines or other establishments
are taxable in all instances.

Example 6:

A take-out establishment sells 10 pieces of chicken, 6 rolls and 1
pound of potato salad as a meal for three persons and charges one
price for the package. A sale of this type is taxable in full.

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TSB-A-86(19)S
Sales Tax
May 15, 1986

Accordingly, Petitioner's baked potatoes, quiche, T.V. dinners, soup, stir-fry foods and salads
will be exempt from the sales and use tax only if Petitioner is able to establish for each of these items
that:
1)

they are sold for off premises consumption as defined in regulation section 527.8(e);

2)

they are sold in an unheated state as defined in regulation section 527.8(e)(1);

3)

they are of a type commonly sold for off premises consumption by food stores as
defined in regulation section 527.8(e)(2); and

4)

they are sold in the same form and condition, quantities and packaging as such food
stores.

This question is necessarily a question of fact which cannot be answered within the context
of an Advisory Opinion inasmuch as the Advisory Opinion function is limited to setting forth the
applicability of pertinent statutory and regulatory provisions to a specified set of facts. It must be
emphasized that the taxability of food items depends not only on what is sold but how they are sold,
i.e. their quantities and packaging.
However, receipts from the sales of cold cut platters, cheese platters, vegetable platters and
fruit platters are subject to tax inasmuch as they come within the provisions of regulation section
527.8(e)(2)(ii) and Example 4 of regulation section 527.8(e)(2)(iv).

DATED: May 15, 1986

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.