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Meals Tax Frequently Asked Questions (FAQs)

1. What is considered a “meal” that is subject to the Meals Tax?
A meal is any prepared food or drink offered or held out for sale by a food establishment for the purpose of being consumed by any person to satisfy the appetite and that is ready for immediate consumption.


2. What is the Meals Tax rate in Middlesex County?
The proposed Meals Tax rate in Middlesex County is 4 percent (4%) of the amount paid for prepared foods purchased in the County. Meals Taxes collected within the Town of Urbanna are paid to the Town.


3. When are Meals Taxes due to Middlesex County?
The twentieth (20th) day of the month following the month in which the taxes are collected, or should have been collected, from the consumer. For example: Meals Taxes collected from consumers in January are due to be remitted to the County on or before February 20.


4. Does the meal, or prepared food, have to be consumed on the premises of the business where it is purchased to be taxable?
NO The meal, or prepared food, is subject to the Meals Tax whether it is intended to be consumed on the seller’s premises or elsewhere and without regard to the manner, time or place of service.


5. Are beverages such as soda, beer, water and others that are in a can, bottle or other factory sealed container subject to the meals tax?
NO Alcoholic and non-alcoholic beverages sold for off-premise consumption in factory sealed containers are exempt from the Meals Tax.


6. What is considered a “restaurant”?
A restaurant as defined by the ordinance is:
1) any place where food is prepared for service to the public whether on or off premises;
2) any place where food is served to the public; or
3) any place or operation which prepares or stores food for distribution to persons of the same business operation of a related business operation for service to the public.


Examples include; restaurants, dining room, grill, coffee shop, cafeteria, cafe, snack bar, lunch counter, lunchroom, short order place, tavern, delicatessen, confectionery, bakery, eating house, eatery, drugstore, catering service, lunch wagon or truck, push carts, or other mobile facility from which food is sold, dining facility in a public or private club, resort, bar, lounge or other similar establishment, convenience stores, theatres, ice cream/yogurt shops.


7. Do Businesses get a commission for aiding the county in the collection of the Tax?
YES Any business that collects the tax may retain a commission of 5% of the total tax they collect to cover administrative costs associated with collection. For example, a restaurant that collections $1000 in tax will be able to retain $50 for its administrative expenses.


8. Are gratuities subject to the Meals Tax?
NO The Virginia Code, § 58.1-3840, provides the following regarding gratuities:
No such taxes on meals may be imposed on:
(1) The amount paid by the purchaser as a discretionary gratuity; or
(2) That portion of the amount paid by the purchaser as a mandatory gratuity or service charge added by the restaurant in addition to the sales price of the meal, but only to the extent that such mandatory gratuity or service charge does not exceed 20% of the sales price; or
(3) Food and beverages sold through vending machines or on any tangible personal property purchased with food coupons issued by the United States Department of Agriculture under the Food Stamp Program or drafts issued through the Virginia Special Supplemental Food Program for Women, Infants, and Children.


9. Are there any exemptions to the Meals Tax?
YES The following items, when served exclusively for off-premise consumption, are exempt from the Meals Tax:
(1) Factory-prepackaged snacks including candy, gum, popcorn, cookies, chips, doughnuts, ice cream, crackers, nabs, and the like and items of essentially the same nature.
(2) Food sold in bulk.
(3) Alcoholic and nonalcoholic beverages sold in factory-sealed containers.
(4) Any food or food product purchased with food coupons issued by the United States Department of Agriculture under the Food Stamp Program or drafts issued through the state special supplemental food program for women, infants, and children.
(5) Any food or food product purchased for home consumption as defined in the federal Food Stamp Act of 1977, 7 USC 2012, as amended, except hot food or hot food products ready for immediate consumption. The following items, whether or not purchased for immediate consumption, are excluded from the definition of food in the federal Food Stamp Act:
sandwiches, salad bar items sold from a salad bar, prepackaged single-serving salads consisting primarily of an assortment of vegetables, and nonfactory-sealed beverages. Items (3), (4) & (5) are not affected by this item.
The following purchases of food and beverages are exempt from the Meals Tax:
(1) Food and beverages furnished by food establishments to employees as part of their compensation when no charge is made to the employee.
(2) Food and beverages sold by day care centers, public or private elementary or secondary schools or food sold by any college or university to its students served on site and paid for as a part of a tuition, meal or similar plan.
(3) Food and beverages furnished by a hospital, medical clinic, convalescent home, nursing home, home for the aged, infirm, handicapped, battered women, narcotic addicts or alcoholics; or other extended care facility to patients or residents thereof and the spouses and children of such persons.
(4) Food and beverages furnished by a public or private nonprofit charitable organization or establishment or a private establishment that contracts with the appropriate agency of the Commonwealth to offer meals at concession prices to elderly, infirm, blind, handicapped or needy persons in their homes or at central locations.
(5) Food and beverages sold on an occasional basis, not exceeding six times per calendar year, by a nonprofit educational, charitable or benevolent organization; church; or religious body as a fundraising activity, the gross proceeds of which are to be used by such organization exclusively for nonprofit educational, charitable, benevolent or religious purposes.
(6) Food and beverages sold through vending machines.


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