N.J. Admin. Code § 18:24-12.5

Current through Register Vol. 56, No. 11, June 3, 2024

Section 18:24-12.5 - Receipts exempt from sales tax

(a) The tax imposed on the sale of food and drink shall not apply to the following:

1. Food and drink sold to an airline for consumption in flight;

2. Food or drink sold in elementary or secondary schools at a restaurant or cafeteria located on the premises of such schools;

3. Food or drink sold to an enrolled post-secondary school student under the terms of a contractual agreement whereby the student does not pay cash when served. The sales may be made at a restaurant, tavern, or other establishment on the premises of the school which is a post-secondary school or in a fraternity, sorority, or eating club operated in connection therewith;

Example: A student who has paid a semester charge for room and board or board alone has entered into a contractual arrangement for food and drink. The arrangement provides for a fixed number of meals over the duration of the contract, which are served in designated areas. The student is provided with identification, which entitles the student to be served meals. This plan qualifies for the exclusion.

4. Food or drink sold to an enrolled post-secondary school student who is not a participant in a student food plan as described in (a)3 above at a restaurant, tavern, or other establishment on the premises of the school of his or her enrollment or in a fraternity, sorority, or eating club operated in connection therewith. A student purchasing food or drink otherwise subject to the tax can be required to exhibit to the seller/cashier a valid student identification card at the time of purchase in order to document the exemption.

5. Food or drink provided as all or part of a food service project funded by government or by private nonprofit organizations to certain elderly or disabled persons for:

i. Meals especially prepared for and delivered to homebound elderly, age 60 or older, and to disabled persons; and

ii. Meals prepared and served at a group sitting at a location outside of the home to the otherwise homebound elderly persons, age 60 or older, and otherwise homebound disabled persons.

6. Food and drink furnished by an employer to employees for the employer's convenience where assigned a money value for purposes of: inclusion in remuneration, which is the basis for computing the employer's contribution to the unemployment insurance fund; social security; or meeting minimum wage requirements (regarding employees of hotels and restaurants). To qualify for exemption, no cash may change hands as payment for the food and drink and the assigned value of such food and drink cannot be classified as income for Federal or New Jersey income tax purposes.

7. Food or drink included in the total charges made by a rest home, residential health care facility, nursing home, and boarding home licensed by the Department of Health, Department of Human Services, or the Department of Community Affairs to residents for board, shelter, and care.

(b) See 18:24-9.1 2 regarding sales of food and drink to exempt organizations.

N.J. Admin. Code § 18:24-12.5

Amended by 48 N.J.R. 824(a), effective 5/16/2016