NYS Sales Tax - Caterers and Catering Services

Welcome to the latest installment of our monthly blog “What are the rules for NYS Sales tax for my profession?”  

Every month we are highlighting another industry with a few of the broad guidelines to follow!  Our hope is not only to provide helpful information for the business owners but the consumers as well!

This month’s industry is 

Caterers and Catering Services

To start it is important to know exactly who is a caterer.  A caterer provides prepared food, beverages, and various other services for events.  These events can take place at a banquet facility, hotel or restaurant or a customer’s home or other location.  Party planners and those who coordinate events also qualify as caterers if they make sales of food and beverages.

Generally all charges by a caterer related to the event are taxable.  This includes:

1. All food and beverages that have been prepared or served. This includes food found in the deli department – for example, cold cuts, fruit salads, cheese platters, etc.  
2. Hotel and banquet facilities charges for the rental of a room that is part of the charge for the event is taxable.   It is important to note that if a customer rents a room for the event and hires a separate caterer then the room rental is not taxable.
3. Tips that a customer leaves voluntarily are not taxable. Mandatory gratuities that are automatically added to the bill are not taxable if all of the following apply: 

• The charge is shown separately on the bill 
• The charge is identified as a tip 
• All the money collected is given to the employees 
• Service charges are subject to sales tax.

This is just a brief overview of the sales tax laws regarding Catering and Catering Services.   

For more information, call 516-409-1120.  

By Christine A. Murphy