Meals Tax Collection and Payment - Harvard as Seller

Use these guidelines to better understand items subject to Meals Tax.

Tax-Exempt Meals

Other Items Subject to Meals Tax

Meals Tax Collection and Payment at Harvard

1. Tubs are required to collect state and local meals tax at the time of sale

   1. tax must be separately listed and separately charged on all invoices, bills or contracts (except those solely for alcoholic beverages);

2. The Tub deposits the proceeds from the sale of meals plus the meals tax into the designated University bank account and retains copy of the validated bank deposit slip;

3. Then the Tub forwards the validated bank deposit ticket along with a completed credit voucher to the Cash Receipts Office;

   1. credit voucher must list separately the amounts of taxable and nontaxable meal sales plus meals tax amounts

4. After each month-end close, Harvard University Dining Services aggregates the data and forwards it to Tax Services;

5. Tax Services calculates the meals tax and remits the tax for the entire University to the Massachusetts Department of Revenue on a monthly basis.

Tax-Exempt Meals

The following meal sales at Harvard are exempt from meals tax:

• Sales to Harvard students presenting a valid University ID purchasing meals in Harvard dining facilities

• Sales from vending machines where each individual item costs less than $3.50

• Sales of meals to other 501(c)(3) tax-exempt organizations

• Sales of meals directly to the federal or Massachusetts governments

• Sales of beverages in unopened containers of 26 fluid ounces or more

• Meals that require significant further preparation in order to make them edible. For example: 
   

  • If a convenience store sells hot slices of pizza to go, the sale of the pizza slices is taxable, but
     
  • If the same store sells frozen pizzas that customers take home to cook then the sale is not taxable because the pizza requires significant additional preparation

Other Items Subject to Meals Tax

In certain cases, the cost of items in addition to a meal may be included in the taxable sales price of that meal, for instance:

Gratuities or service charges included as part of the price of a meal are included in the taxable sales price. For example:

A local for-profit business hosts an event at the Faculty Club at which food is served; when the Faculty Club adds a taxable surcharge for the wait staff service, this surcharge is rolled into the price of the food.

University room rental charges may be included in the taxable sales price if the following conditions are met: 

• 1. 1. 1. 1. The room is rented for the purpose of serving the meal, and 

           2. The meal is provided by the University

NOTE: if a room is rented for purposes other than serving a meal and light refreshments are provided, the meals tax only applies to the price of the refreshments as long as the charge is stated separately on both the bill to the customer and in the University's records.

Example A: A local for-profit business hosts a luncheon in a function room at the Faculty Club. Both the food served and the room rental charges are included in the taxable sales price of the meal.

Example B: The same local for-profit business holds a training session in a function room at the Faculty Club. During the training session, beverages and snacks are provided. On the invoice, the charges for the room rental and the refreshments are stated separately -- only the sales price of the refreshments is taxable.

Admission charges for entertainment or recreation

Sales tax is imposed on admission charges received by a place of entertainment where food and/or alcoholic beverages are sold, unless all of the following conditions are met:

• • A ticket is sold and collected as proof of the admission price;

  • The customer is not obligated to buy any food or beverage; and

  • The admission charges are stated separately in the records of the place of entertainment

Discounted Meals

If customers presenting a coupon receive a discount from the regular price of a meal, the discounted price paid is the amount subject to tax.