FlyerTalk Forums - View Single Post - why don't airlines have to collect state sales tax on onboard food-for-purchase?
Old Dec 4, 2010 | 8:05 am
  #6  
cordelli
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Join Date: Feb 2000
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It is included in the price. I am almost certain it's based on where the airline takes delivery of the food, not where it's served, so if their supplier sells them the food in Boston, Massachusetts law would apply, if in St Louis, than Minnesota code would apply, but each state is different

Minnesota for example requires the vendor to collect sales tax on food delivered that is not for resale, and they require the airline to pay sales tax on food that is for resale. From their tax code

Application of Tax to Taxable Food Served by Airlines

If an airline serves taxable food as part of its transportation service and no separate charge is made for the food, there is no sale of taxable food by the airline within the meaning of the Sales and Use Tax Law. Under these circumstances, the sale of the taxable food in Minnesota to the airline is a taxable retail sale. Persons who sell taxable food to an airline for use in its transportation service and not to be resold by the airline must charge sales tax on the sales price of the taxable food.

If an airline purchases taxable food for sale to passengers who are separately charged for the food, the sale to the airline is exempt, for the purpose of resale. The airline needs to provide their supplier with a fully completed certificate of exemption in order to claim the exemption. The sale of the taxable food by the airline to its passengers is taxable.


Massachusetts on the other hand does not collect tax on food for airlines:

f) Commercial Airlines.

1. Sales to passengers. The furnishing of meals to commercial airline passengers in commercial aircraft, whether the aircraft is in flight or on the ground, is exempt from the sales tax.

2. Sales to airline. The sale of meals to a commercial airline for consumption by its passengers in the aircraft is exempt from the sales tax.


My guess would be you would have to go through the tax code of each state you take delivery of food in to be able to follow it all (or just have software that does it for you)
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