Tax Type
Retail Sales and Use Tax
Description
Bottle of liquor, drinks by the glass
Topic
Taxability of Persons and Transactions
Date Issued
10-31-1984
- October 31, 1984
Re: Ruling Request: Sales and Use Tax
Dear ****
This will reply to your letter of July 19, 1984, concerning applicability of retail sales and use tax to drinks made with the liquor of a member of your client, ***** (the "Club").
FACTS
A member of the Club brings a bottle of liquor to the Club's bartender, who charges the member a set price based on the size of the bottle. The price covers such things as labor, set-up and ice for preparing a drink from that bottle for the member ant guests. There is no additional charge for the drinks, and sales tax is imposed on the original "set price."
Determination
When the member delivers to the bartender the bottle from which drinks are prepared and a set price baaed on the size of the bottle is charged, it is similar to imposition of a "cover charge" or "minimum charge" which entitles the customer to food, drinks or other tangible property. Such a charge constitutes a sale of property and is subject to sales tax. Similarly, the "set price" represents prepayment of the labor, set-up and ice for preparing drinks from the bottle. Therefore, the Club's imposition of sales tax on the "set price" is proper and should continue.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner