Restaurants and Bars

You owe tax on restaurants and bars if:
Your are engaged in the business of sales of prepared food and drink for consumption on or off the premises in the city.

Examples of taxable facilities:

  • Standard eat-in restaurant
  • Restaurant serving food to eat in or to go
  • A restaurant section located in a retail store
  • Deli serving prepared food
  • Bars, taverns
  • Ice cream parlors
    Employee cafeteria

    The following facilities are not subject to the tax:

  • Convalescent homes
  • Military installations
  • Schools
  • Fraternal organizations serving food to members
  • Day care centers
  • Nursing homes, hospitals



Tax rate on restaurants and bars
The City of Mesa tax rate is 1.75% of the gross income from the business of restaurants and bars.  (Note: The Mesa City Tax rate increased to 1.75% effective 07/01/2006)

Collection of tax
You may choose to charge the tax separately on each sale, or include transaction privilege tax in your price. If you over charge any tax to your customers, you must remit the excess tax to the city.
If you include tax in your price, you can use factoring to "back into" the tax included in your gross sales.

 

Special situations

  1. Caterers
    Persons who prepare then deliver or serve food are taxable as restaurants based upon their business location. Additional charges to customers for setup, delivery, clean up are exempt provided the charges are separately itemized to customers and maintained in records.

  2. Government Personnel
    Sales to U.S. Government military, state and city personnel are not excludable from taxable income.

  3. Tips collected from patrons
    Gratuities (tips) collected from patrons are not subject to tax provided:
    1. Separate records are maintained for the amounts collected and
    2. All gratuities collected are distributed to the employees providing the service for which such gratuity was collected.

  4. Fund raising
    Sales of food and drink as a means of fund raising by churches, lodges, and other nonprofit charitable organizations not regularly engaged in the restaurant business are exempt from the City of Mesa tax.

  5. Cover charges
    Cover charges and other minimum charges made by a restaurant or bar are considered taxable. Charges for admission to entertainment are considered taxable amusement revenues and are reportable under that classification.

  6. Employee meals
    Charges by a restaurant to its employees for meals are taxable restaurant sales. If a charge is not made for food and beverage provided to employees, the cost of the items provided is subject to city use tax.

  7. Complimentary items
    Promotional or complimentary items which are served to patrons free of charge are subject to city use tax based upon the cost of the items provided to the restaurant.

    Sales of food to a public school cafeteria are exempt.

    Sales of food and accessories for commercial airline meals are exempt.



Exemptions available for items you purchase
Purchase of food, beverages and condiments which are resold by the restaurant are not subject to tax when purchased from suppliers. Purchases of non-returnable or disposable paper, cups, plates, bags, napkins, straws, knives, forks and other similar food accessories to contain or facilitate the consumption of the food, drinks, or condiments are also sales for resale and not taxable when purchased from suppliers.
 

 

Office Locations:
Licensing Office
55 N. Center St.
Mesa, AZ  85201
Phone: 480-644-2316
FAX: 480-644-3999

Tax Audit & Collections
20 E. Main St, Suite 450
Mesa, AZ 85201
Phone: 480-644-3816
FAX: 480-644-2687


Office Hours:

Monday - Thursday
7:00 a.m. to 6:00 p.m.
Closed Fridays

Mailing Address:
Tax & Licensing Office
P.O. Box 1466
Mesa, Arizona 85211-1466

E-mail:

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