TO: ALL EATING AND/OR DRINKING ESTABLISHENTS
The 2003 Session of the Rhode Island General Assembly enacted legislation requiring all "eating and/or drinking establishments" to charge and collect a one percent (1%) local tax on the sale of "meals" and/or "beverages" within this state, effective August 1, 2003.
The tax applies whether the meals and/or beverages are prepared in the eating and/or drinking establishment or not and whether consumed at the premises or not. The rate of one percent (1%) must be shown separately on the bill of sale. The local tax is to be paid to the Division of Taxation along with the 7% state sales tax. All local taxes received by the Division will be distributed to the city or town where the meals and beverages are delivered.
A combined returnw ill be used to report the seven percent (7%) state sales taxes and the local one percent (1%) tax. The 1% tax will be reported on the return by city or town where the meals and/or beverage are delivered
The terms beverage, meal, and eating and/or drinking establishment as defined by law are listed below.
Should you have any questions regarding this notice, please call the Division of Taxation at (401) 222-2950, Monday through Friday between 8:30 AM and 4:00 PM.
Note: The 1% local tax is to separately stated from the 7% state sales tax. In the event that this requirement causes a hardship to a business, that business may issue receipts with the taxes combined at an 8% rate. Although the receip to the customer may combine rates, the business must still maintain its books and records in such manner to segregate the two taxes in order to properly report them to the Division of Taxation.
Ordinarily, eating establishments do not mean and include food stores and supermarkets.
Retailers selling prepared foods in bulk either in customer- furnished containers or in the seller's containers, for example "Soup and Sauce" establishments, are deemed to be selling prepared foods ordinarily for immediate consumption and as such are considered eating establishments.