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:
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%
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
"back into" the tax included in your gross sales.
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.
- Government Personnel
Sales to U.S. Government military, state and
city personnel are not excludable from taxable income.
- Tips collected from patrons
Gratuities (tips) collected from patrons are
not subject to tax provided:
- Separate records are maintained for the amounts collected and
- All gratuities collected are distributed to the employees
providing the service for which such gratuity was collected.
- 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.
- 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
- 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
- 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.