Section 280-RICR-20-70-4.13 - Threshold TestA. The following rules have been adopted by the Streamlined Sales Tax Governing Board to determine how utensils are treated and their impact on the sale of various food items. Under the approved interpretation, a Threshold Test, which determines the percentage of sales considered to be prepared food, was created to add consistency to the meaning of the term "provided by the seller." The Division is required to use this test in making determinations of the taxability of prepared food and beverage sales. The calculation is as follows: 1. The numerator includes sales of prepared food under §§ 4.5(I)(1) and (2) of this Part of the definition of prepared food; and food where plates, bowls, glasses or cups are necessary to receive the food (e.g., dispensed milk, fountain beverages, salad bar). Alcoholic beverages are not included in the numerator.2. The denominator includes sales of all food and food ingredients, including prepared food, candy, dietary supplements, and soft drinks. Alcoholic beverages are not included in the denominator.B. Application of the Threshold Test 1. For sellers with a sales percentage of (Seventy-Five Percent) 75% or less, utensils are provided by the seller if the seller's practice for the item (as represented by the seller) is to physically give or hand the utensil to the purchaser, except that plates, bowls, glasses, or cups necessary for the purchaser to receive the food (e.g., dispensed milk, salad bar) need only be made available.2. For sellers with a sales percentage greater than (seventy-five percent) 75%, utensils are provided by the seller if they are merely made available to purchasers. Thus, utensils at a kiosk or common area are treated as utensils "provided by the seller."3. For sellers with a sales percentage greater than (seventy-five percent) 75% who sell items that contain (four) 4 or more servings packaged as one item sold for a single price, an item does not become prepared food due to the seller having utensils available (e.g. ground coffee, whole cakes, loaves of bread). However, if the seller provides utensils for the item, the item is considered prepared food. Whenever available, serving sizes will be determined based on a label on an item sold. If no label is available, a seller will reasonably determine the number of servings in an item.4. When a seller sells food items that have a utensil placed in a package by a person other than the seller, and that person's NAICS classification code is that of a manufacturer (sector 311), the seller shall not be considered to have provided the utensil except as provided in §§ 4.13(B)(1) through (3) of this Part. For any other packager with any other NAICS classification code (e.g., sector 722 for caterers), the seller shall be considered to have provided the utensil.5. The prepared food sales percentage will be calculated by the seller for each tax year or business fiscal year, based on the seller's data from the prior tax year or business fiscal year, as soon as possible after accounting records are available, but not later than (ninety) 90 days after the beginning of the tax or business fiscal year.6. A single prepared food sales percentage will be determined annually, for all of the seller's establishments in a state. A new business will make a good faith estimate of their prepared food sales percentage for their first year. A new business should adjust its good faith estimate prospectively after the first three months of operation if actual prepared food sales percentages materially affect the (Seventy-Five percent) 75% Threshold Test.280 R.I. Code R. § 280-RICR-20-70-4.13