Prepared Food & Beverage Tax

Get more information on the Prepared Food and Beverage Tax collected by our department. Learn how to set up an account and the filing requirements.

Overview

The Wake County Board of Commissioners levied a Prepared Food and Beverage Tax of 1% of the sale price of prepared food and beverages effective January 1, 1993. This tax is applicable to all prepared food and beverages sold at retail for consumption, on or off the premises, by any retailer with sales in Wake County that are subject to sales tax imposed by the State under North Carolina General Statute (NCGS) 105-164.4(a)(1). This tax is collected by the merchant, in addition to NC State Sales Tax, and is remitted to the county on a monthly basis.

General Filing Information

Retailers must complete a Prepared Food & Beverage Tax Application to establish an account number for tax reporting purposes. Email completed application to taxhelp@wake.gov or mail to:

Wake County Tax Administration
Prepared Food & Beverage Division
P.O. Box 2719
Raleigh NC 27602-2719

For assistance in completing an application or questions regarding the Prepared Food and Beverage tax, please call our office at 919-856-5999 or email taxhelp@wake.gov.

Important information on your PIN

Once a tax account number is established, a letter containing your account's PIN code will be mailed to you . You will be asked to provide this PIN when calling or visiting our office to discuss account information. The PIN is also required to complete online filing and electronic payments . A PIN may also be obtained by calling our office at 919-856-5999.

• A report must be filed each month on or before the twentieth day of the month following the month in which the tax accrues.
• Reports must be filed online or postmarked by the U.S. Postal Service by the twentieth day of the month following the month in which the tax accrues. Metered mail is considered to be received as of the date the remittance is received in this office.
• The tax shown to be due must be paid with the report or penalties will be charged. See NCGS 105.236 for information regarding penalties.
• If remitted by mail, your check or money order should be made payable to the Wake County Department of Tax Administration. One check for all locations will be accepted; however, a separate report for each location must be filed.
• If you do not owe any tax for a month, you must file a "Zero Due Return" using the online system or mail a report showing "No Tax Due" to our office.
• As provided in NCGS 153A-148.1, a return filed with the Wake County Department of Tax Administration shall not be considered a public record and information contained in a return may not be disclosed except as required by law.

Return Check Penalties

Penalty for Bad Checks – When the bank upon which any uncertified check tendered to the Department of Revenue in payment of any obligation due to the Department returns the check because of insufficient funds or the nonexistence of an account of the drawer, the Secretary shall assess a penalty equal to ten percent (10%) of the check, subject to a minimum of one dollar ($1.00) and a maximum of one thousand dollars ($1,000). This penalty does not apply if the Secretary finds that, when the check was presented for payment, the drawer of the check had sufficient funds in an account at a financial institution to pay the check and, by inadvertence, the drawer of the check failed to draw the check on the account that had sufficient funds.

Penalty for Bad Electronic Funds Transfer – When an electronic funds transfer cannot be completed due to insufficient funds or the nonexistence of an account of the transferor, the Secretary shall assess a penalty equal to ten percent (10%) of the amount of the transfer, subject to a minimum of one dollar ($1.00) and a maximum of one thousand dollars ($1,000). This penalty may be waived by the Secretary in accordance with G.S. 105-237.

For more information on return check penalties, view NCGS 105-236.

Prepared Food and Beverage Basics

A prepared food or beverage is defined as any food or beverage which has been altered (other than solely by cooling) by preparing, combining, dividing, heating, or serving, in order to make the food or beverage available for immediate human consumption.

In addition to establishments such as restaurants, sandwich shops, and delicatessens, this tax also applies to any establishment, which dispenses any beverage or prepares any type food such as popcorn, cotton candy, etc.

A rate chart is available to assist you in calculating the total tax to charge.

The Prepared Food and Beverage Tax does not apply to the following sales of food and beverage:

• Sales through vending machines.
• Retail sales exempt from taxation under G.S. 105-164.13 (Exemptions and Exclusions) on January 1993.
• Sales prepared by someone other than the retailer for immediate consumption and merely placed on display for sale purposes. Examples include prewrapped sandwiches, packaged crackers, prepacked ice cream, etc.
• Prepared food and beverages served by any establishment subject to the County's Occupancy Tax if the charge for the food or beverage is included in a single, non-itemized sales price, together with the charge for room rental, lodging, or accommodations furnished by the taxable establishment.
• Prepared food and beverages furnished without charge by an employer to any employee.
• Prepared food and beverages served to residents in boarding houses on a periodic basis, which are included with the rental of any sleeping room or lodging.

Does my Business need to file and pay the Prepared Food and Beverage Tax?

Subject Businesses

Subject businesses are any retailer within Wake County that are subject to sales tax imposed by the State of North Carolina under section 105-164.4(a)(1) of the North Carolina General Statutes, which would include:

• Restaurants
• Cafes
• Cafeterias*
• Coffee shops
• Grills
• Snack bars/carts
• Lounges
• Bars
• Taverns
• Mobile vendors
• Vendors at sporting, cultural and entertainment events
• Fast food establishments
• Drive-in establishments
• Private club dining facilities
• Caterers
• Independent bakeries
• Grocer and independent delicatessens
• Convenience store/marts
• Luncheon counters/soda fountains at drugstores
• Pharmacies and other general retail stores
• Nightclubs
• Wet bars
• Concession stands
• Ice cream parlors/shops
• Employee cafeterias that charge for food and beverages
• Any other establishment, place of business or enterprise maintaining facilities, equipment, services or inventory for the sale of any type or kind of prepared food, food product, meal or beverage sold to consumers.

*Effective January 1, 2014 , prepared food sold to a college student in a dining room, cafeteria, or similar establishment regularly operated by or on behalf of an institution of higher education in this State, including an institution of the University of North Carolina, a private institution of higher education, or by student organizations thereof, is subject to the Wake County Prepared Food and Beverage tax.

Rules and Regulations

Prepared Food and Beverage Rules and Regulations

Any food or beverage which is prepared to the order of the purchaser or which is cooked and/or maintained at or near the cooking temperature or kept at or above room temperature to make it or for it to remain palatable and suitable prior to sale, shall be considered to be made available for immediate consumption and subject to the Prepared Food and Beverage Tax.

• Sales from vending machines are specifically exempt from the Prepared Food and Beverage Tax.
• Sales of prepared food and beverages are subject to the Tax unless prepared by someone other than the retailer for immediate consumption and merely placed on display for sale purposes. Examples include prewrapped sandwiches, packaged crackers, prepacked ice cream, etc.
• Sales of prepared foods and beverages available for immediate consumption that are sold on a "take- out", "to-go" or delivery basis are subject to the Prepared Food and Beverage Tax.
• Any alcoholic or nonalcoholic beverage sold by the drink or as part of a meal is subject to this tax. Exceptions would be soft drinks and alcoholic beverages (i) purchased in unopened package form (i.e., six pack, cans, bottles, cases) and (ii) not to be consumed on the premises of the retailer or where otherwise served by a caterer. Examples of taxable beverages include a bottled drink sold by a caterer or bar for opening and consumption by a customer on the retailers premises or whenever served by a caterer and orange juice and milk served at a fast food establishment; nontaxable beverages include can drinks sold by a convenience store and a bottle of wine sold by a retailer for "take-out" by the consumer.
• Prepared Food and Beverage sales made to the general public or employees that are paid for, directly or indirectly, by cash, charge card, payroll deduction, meal ticket, voucher or other means are subject to this tax and must be collected by the retailer or employer.
• Sales derived from Salad Bars (i.e. cut-up fruits and vegetables) sold in various sized servings, usually by the pound or plates are subject to this tax.
• Salad items such as potato salad, coleslaw, macaroni, bean and congealed salads including chicken salad, etc., and sliced or unsliced meats that the retailer has not altered by heating or combining two or more foods (i.e. retailer is merely repackaging), which are sold in carry-out containers, are not subject to this tax; any of the forgoing sold as part of a meal, deli tray or otherwise as part of a steamed table products is subject to this tax.
• Whole pies and cakes altered on-site in any way (icing added, decorated, baked, etc.) are subject to this tax.

Additional Rules and Regulations by Retailer Type

In addition to the foregoing, the following rules and regulations apply to the category or retailers set forth below:

Independent Bakeries

Food and beverages prepared by an independent bakery are subject to this tax if baked, decorated or altered in any way on the retailer's site.

Artisan Bakeries (effective January 1, 2009)

Bakery items (bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danishes, cakes, tortes, pies, tarts, muffins, bars, cookies and tortillas) sold without eating utensils by an artisan bakery are exempt from the Prepared Food and Beverage Tax. An "artisan bakery" is a bakery that derives over 80% of its gross receipts from bakery items and whose annual gross receipts, combined with the gross receipts of all related persons as defined in NCGS 105-164.13B(a)(4), do not exceed $1,800,000.

Caterers and Food Delivery Services

Any food or beverages prepared by a caterer or food delivery service (regardless of the primary place of business or place of food preparation) and served within Wake County is subject to the Prepared Food and Beverage Tax. All charges are subject to this tax except gratuities of 20% or less that are separately stated on the invoice and distributed to service personnel.

Any food or beverage prepared by caterers or food delivery services located within Wake County to be served outside the County will not be subject to the Prepared Food and Beverage Tax.

Convenience Stores

Examples of food and beverages subject to this tax include hot dogs (whether placed on rotisserie by customer or retailer), brewed coffee, fountain drinks and dip ice cream, etc. Prepackaged sandwiches prepared by someone other than the retailer are not subject to this tax.

Temporary Vendors

All temporary food and beverage vendors that operate as such, must make a fifty dollar ($50) cash prepayment at least one (1) week in advance prior to commencement of business to the Wake County Department of Tax Administration and any additional tax monies due must be paid with the Prepared Food and Beverage Tax Return. A refund will be made if determination is made by the Tax Administration office that the tax amount due (plus penalties, if any) is less than the original prepayment amount.

Grocers, Independent Delicatessens and Other Diversified Retail Establishments

Sales of prepared food and beverages in independent delicatessens and in the delicatessen or similar department of a grocer or other diversified retail establishment that are subject to taxation under the Ordinance shall be limited to the sale of any Prepared Food or Beverage that is (i) heated when sold, (ii) sold as a single serving, or (iii) sold as a steamed table product, (iv) altered in any way (except sliced or repackaged) or, (v) any two or more foods and or ingredients combined to make a single item sold as a single serving or sold as a whole packaged item or sold in bulk. For purposes of the Regulation, a "steamed table product" shall mean any one or more foods and beverages sold collectively as a meal available for immediate consumption, including without limitation both heated and cooled foods and beverages.

• Deli trays (meat, cheese, fruit, etc.) are subject to the Prepared Food and Beverage Tax.
• Sales derived from Salad Bars (i.e. cut up fruits and vegetables) sold in various sized servings, usually by the pound or plates are subject to this tax.

Effective Date

All above foregoing Rules and Regulations became effective January 1, 1993, and may be added to, modified or rescinded by order of the Wake County Department of Tax Administration at any time.