Galena Group

Do You Owe Sales Tax on Food You Sell and Don’t Know It?

Effective May 14, 2021, Nevada repealed outdated NRS provisions on exemption of food for human consumption.

Effective 05/14/2021, L. 2021, S25 (c. 15) repealed Nevada Revised Statute § 372.2841 and Nevada Revised Statute § 374.2891, eliminating a requirement of existing law that predates Nevada’s adoption of the Streamlined Sales and Use Tax Agreement (Agreement) and that requires the Department of Taxation, in determining whether food intended for human consumption is subject to the sales and use tax, to base its determination on whether the food is intended for immediate consumption and not on the type of establishment where the food is sold. Existing law generally exempts food for human consumption from sales and use taxes, but existing law excludes from this exemption, and imposes sales and use taxes on, prepared food intended for immediate consumption. Consistent with the Agreement, existing law defines “prepared food” to include food sold with eating utensils provided by the seller, and in accordance with its obligation to adopt regulations to implement the Agreement, the Nevada Tax Commission adopted a regulation that establishes a method to determine whether food sold at retail is deemed to be sold with eating utensils provided by the seller. Under that regulation, this determination is based on the percentage of food sold by the seller that qualifies as prepared food.

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