Welcome and Introduction
Welcome to the City of Winchester! It is our hope that this guide will give you a clear understanding of the meals tax ordinance as it applies to your business, organization, or establishment.
First Step
The first step in the process is to determine if meals tax applies to you. Do you sell prepared food and/or beverages from a business, organization or establishment which is located in the City?
- If the answer is no, this guide does not apply to you.
- If the answer is yes, please proceed.
Definitions
Local Excise Meals Tax
The City of Winchester imposes a 6% tax on the purchaser of every meal served, sold, or delivered by a food establishment, vendor or a caterer located in the City whether consumed on the premises or not. (City Code Article VI Meals Tax Section 27-20)
Meal
Meal shall mean any prepared food and/or drink, including alcoholic beverages, offered or held out for sale by a food establishment for the purpose of being consumed by an individual or group of individuals at one time to satisfy the appetite and which is ready for human consumption. Consumption can be on or off the seller’s premises.
Purchaser
The purchaser shall be any person who purchases a meal.
Restaurant/Food Establishment
Any place, in the City of Winchester, in or from which food or food products are prepared, packaged, sold or distributed. A restaurant is any eating or drinking establishment-whether stationary or mobile, temporary or permanent- that is primarily engaged in the business of selling meals for which a charge is made.
Examples include: Cafes, Cafeterias, Canteen trucks or wagons, Catering Businesses, Bars, Coffee Shops, Diners, Dining Rooms, including Hotel and Motel dining rooms, Ice cream or other food product stands, Lunch counters, Private or Social Clubs, Salad bars, Snack Bars, Street Carts and Food Trucks.
Taxation shall be the locality in which sales are made (where the place of business is located) without regard to the locality of delivery or possible use by the purchaser.
Seller
Any business, organization, establishment, restaurant, or caterer selling a meal as defined in this guide, or the person operating such business.
Common Questions Regarding Meals Taxes
What is the City Excise tax on meals?
The State Code of Virginia provides for local jurisdictions to impose an excise tax on meals. As such, the City Council of Winchester has levied a 6% tax on the amount paid for meals purchased from any food establishment.
Who pays the Tax?
This tax is collected from the purchaser at the time the meal is purchased. This 6% tax is held in trust by the seller. The 20th of each month the seller remits the tax, collected for the previous month, on forms provided by the office of the Commissioner of the Revenue.
What are the responsibilities of the seller?
- Obtain a valid business license from the Commissioner of the Revenue.
- Complete an application for a Meals Tax Account with the office of the Commissioner of the Revenue.
- Collect 6% on all taxable sales of meals.
- Complete the monthly Meals Tax Return, pay and mail this by the 20th of each following month. Remittance must be on forms prescribed by the Commissioner of the Revenue.
- Keep complete, detailed and accurate records of gross receipts from all sales, whether taxable or not for a period of two years. The record shall include the amount charged the purchaser, the date of each purchase, and the taxes collected.
How does a Seller register to collect the tax on meals?
The first step in this process is to obtain a business license to conduct business in the City of Winchester. These forms can be obtained either online or by visiting the Commissioner of the Revenue office at the Creamery Building (21 S. Kent Street). The business license application contains a section for meals tax registration.
The Commissioner’s office will provide a set of remittance forms along with filing instructions. Blank forms are also available through the City's website.
Meals Taxable Items
The following examples, while not all-inclusive, may guide you as you determine the food and drink items that are taxable.
- All prepared food or drink
- Alcoholic Beverages sold with or without food
- Soft Drinks sold with or without food
- Individual pastries or snacks
- Ice cream cones
- Individual servings from salad bars or a deli counter
- Prepared pizzas or pizza slices
- All other prepared food or drink sold that is to be consumed at one time
- Hot foods, sandwiches, salad bar items from a salad bar, prepackaged single-serving salads and non-factory sealed beverages
Meals Tax Exempt Items
The following are exempt and therefore not subject to Meals Tax:
- Factory prepackaged food and factory-sealed beverages, alcoholic or non-alcoholic sold for off-premises consumption
- Food and beverages sold in grocery stores, supermarkets or convenience stores that are not prepared food or beverages for immediate consumption
- Factory prepackaged foods
- Total sales of less than fifty cents
- Food Stamp sales or W.I.C. sales
- Theatre sales of non-alcoholic beverages, popcorn and candy
- Factory prepackaged candy, gum, nuts, and other items of this nature
- Factory prepackaged donuts, ice cream, crackers, chips, cookies, and items of this nature, not sold as part of a meal
- Food sold in bulk. A bulk sale is any item that would exceed the normal portion sold for premises consumption. An example is a whole cake or a gallon of ice cream. However, a bulk sale shall not include any food or beverage that is catered or delivered by a food establishment for off-premises consumption.
- Sales of Gift Certificates
- Re-sellers must provide our office with a copy of the completed Virginia State ST-10
Filing and Payment Information
Meals tax filings to be submitted monthly with on the proper forms. Remittance shall accompany each submission. In order to be considered timely, the filing must be received in the Commissioner’s office by the 20th of each month, OR postmarked on or before the 20th by a third-party postal carrier (e.g. USPS, FedEx or UPS). We cannot use in-house printed postage marks for purpose of timely verification.
If the 20th falls on a weekend, holiday, or day that City Hall is closed for other reasons, the filing deadline is extended to the next business day.
Late filings are subject to a 10% late filing penalty, and if not paid within 30 days, an additional 10% late payment penalty. In addition, interest of 10% per year or .833% per month, begins 21st of each month after the due date and is applied to the outstanding tax and penalty.
Additional Information
- Tips and Service Charges – Tips given by purchasers, if they are not required by the seller, are not subject to meals tax. However, if a tip is automatically assessed by the seller, this amount is subject to the 6% meals tax.
- Meals furnished to employees as part of their compensation when no charge is made to the employee are not subject to meals tax.
- Schools, Day Care Centers, College or Universities, Hospitals, Elderly Homes, Non-profit Educational Facilities are exempt from meals taxes.
- Non-Profit Educational, Religious, Charitable or Benevolent Organizations selling on an occasional basis as a fundraising activity are exempt from meals taxes.
- Vending Machine Sales are exempt from meals taxes.
Virginia State Sales Tax Questions must be directed to www.tax.virginia.gov.