Are a convenience store's single-serve yogurt cups taxable when the store also offers a few tables and seats for customers?

Plain-English summary

A convenience store chain sells single-serve 8-ounce yogurt cups and also offers a little seating (a few indoor booths and a couple of outdoor picnic tables). It asked whether the seating makes the yogurt taxable.

The Office of Counsel said the cups are exempt food when sold for off-premises consumption. Food sold for on-premises consumption is always taxable, but food sold to go is exempt if it's unheated and "of a type commonly sold for consumption off the premises and in the same form and condition, quantities and packaging" as a grocery store. The yogurt cups are identical to grocery-store cups, sold cold and lidded for eating elsewhere — so they qualify. The Department stressed that the mere presence of tables and chairs doesn't make all sales taxable, and that putting the cups in a front open cooler vs. a rear closed cooler doesn't decide taxability either. Only when the cups are sold for on-premises consumption are they taxable.

What this means for you

Convenience stores, delis, and groceries with some seating

Offering a few seats doesn't automatically tax your packaged, unheated grocery-type foods sold to go. The test is on-premises vs. off-premises consumption and whether the item is sold in grocery-store form — not whether a table exists in the store.

Operators of mixed prepared-food/grocery counters

Keep the line clear: heated/prepared food and anything sold for eating on-site is taxable; cold, grocery-packaged items sold to go are exempt. Train staff and POS to flag on-premises sales.

Accountants and tax professionals

Apply § 1105(d)(i)(1) (on-premises taxable) and the § 1105(d)(i)(3) off-premises carve-out (unheated, grocery form/quantity/packaging), per 20 NYCRR 527.8 and TB-ST-135. Seating presence isn't dispositive.

Common questions

Q: We have a few tables — does that make our packaged snacks taxable?
A: No. The presence of seating alone doesn't tax packaged, unheated grocery-style food sold to go; only on-premises sales are taxable.

Q: Does it matter which cooler the yogurt is in?
A: No. Front open cooler vs. rear closed cooler doesn't determine taxability.

Q: When is the yogurt taxable?
A: When it's sold for on-premises consumption.

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner. Use it as guidance and confirm your own facts.

Citations and references

• Tax Law § 1105(a) (sales tax on tangible personal property)
• Tax Law § 1115(a) (exemption for food and food products sold for human consumption)
• Tax Law § 1105(d)(i)(1) (food sold for on-premises consumption is taxable)
• Tax Law § 1105(d)(i)(3) (off-premises food exempt if unheated and in grocery-store form/packaging)
• 20 NYCRR 527.8(d), (e); TB-ST-525; TB-ST-283; TB-ST-135

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales-ao-2020.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a20-50s.pdf

Original ruling text

New York State Department of Taxation and Finance
Office of Counsel

TSB-A-20(50)S
Sales Tax
October 27, 2020

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION
The Department of Taxation and Finance received a Petition for Advisory Opinion from
[ REDACTED ] “(Petitioner”). Petitioner asks whether its sales of individual 8-ounce yogurt
cups while maintaining in-store and outside seating at its stores are subject to sales tax.
We conclude that Petitioner's sales of individual 8-ounce yogurt cups in its stores are not
subject to New York State and local sales taxes when sold for off-premises consumption. If
Petitioner sells the product for on-premises consumption, the product would be subject to New
York State and local sales taxes.
Facts
Petitioner is a convenience store chain with numerous locations throughout New York
State. These locations have both indoor and outdoor seating for customers. The indoor seating
typically consists of 3-4 booths and the outdoor seating typically consists of 2 picnic tables.
Petitioner locates the individual 8-ounce yogurt cups (“product”) that it sells in both open face
coolers in the front of its stores and in closed coolers in the rear of its stores. The product is sold
in an individual serving size container from which the customer can directly consume its
contents. In all instances the product is covered with a lid so that the customer may consume its
contents off-premises. Petitioner states that the yogurt cups are identical to those sold in grocery
stores.
Analysis
Receipts from the retail sales of food, food products, beverages, dietary foods and
health supplements, sold for human consumption, generally are exempt from New York State
sales and use taxes imposed under Tax Law § 1105(a) on the retail sale of tangible personal
property. See Tax Law § 1115(a). Accordingly, yogurt cups of the kind Petitioner sells generally
are exempt from sales taxes. See TB-ST-525; TB-ST-283; TB-ST-135. However, Tax Law §
1105(d)(i)(1) provides that sales of food or drink are taxable in all instances where the sale is for
consumption on the premises where sold. Consumption on the premises means that “the food or
drink sold may be consumed on the premises where the vendor conducts its business,” while offpremises consumption means the food “is intended to be consumed at a place away from the
vendor’s premises.” See 20 NYCRR 527.8(d)(e). In addition, Tax Law § 1105(d)(i)(3) provides
that sales of food or drink are taxable in those instances where the sale is for consumption off the
premises of the vendor unless the food or drink (other than sandwiches) is sold in an unheated
state, and is of a type commonly sold for consumption off the premises and in the same form and

-2-

TSB-A-20(50)S
Sales Tax
October 27. 2020

condition, quantities and packaging in establishments that are food stores, other than those
principally engaged in selling foods prepared and ready to be eaten.
Petitioner states that it provides tables and chairs for its customers to eat prepared foods
on-premises. However, the mere presence of tables and chairs does not make all its sales taxable.
Similarly, the placement of the product in an open cooler in front of the store or in a closed
cooler in the rear of the store does not determine whether the product is subject to tax. Rather,
because Petitioner’s product is sold in an unheated state and in the same form and condition,
quantities and packaging as in grocery stores, we conclude that the yogurt cups are not subject to
New York State and local sales taxes if sold for off-premises consumption. See Tax Law §
1105(d)(i)(3); TB-ST-135. If Petitioner sells the yogurt cups for on-premises consumption, they
would be subject to sales tax.
DATED: October 27, 2020

/S/
DEBORAH R. LIEBMAN
Deputy Counsel
NOTE:

An Advisory Opinion is issued at the request of a person or entity. It is limited to the
facts set forth therein and is binding on the Department only with respect to the
person or entity to whom it is issued and only if the person or entity fully and
accurately describes all relevant facts. An Advisory Opinion is based on the law,
regulations, and Department policies in effect as of the date the Opinion is issued or
for the specific time period at issue in the Opinion. The information provided in this
document does not cover every situation and is not intended to replace the law or
change its meaning.