Tennessee – Itemization of Tax Permitted

SALT Report 2281 – The Tennessee Department of Revenue issued a ruling regarding a restaurant chain’s receipts for alcoholic beverages. Tennessee law requires that anyone who sells alcoholic beverages for on-premises consumption include the alcoholic beverage tax and sales tax in the price shown on any menus provided to its customers.

Currently, when the Taxpayers provide a receipt to its customers, the receipt lists each item purchased and then has a line for the sales tax charged on food and beer only. The Tennessee alcoholic beverage taxes are included in the drink prices and are not separately stated on the receipt. Because of this the Taxpayer would like to separately itemize its receipts to show the alcoholic beverage purchase price, the state sales tax, and the 15% alcoholic beverage tax.

The Department’s regulations regarding the presentation of the sales price of alcoholic beverages to its customers, states that “all licensees shall have available for use by all customers, menus which clearly indicate the sales price of alcoholic beverages, both liquor and wine, and that the sales price includes the applicable rate of alcoholic beverage tax and sales tax.” In other words, the Taxpayers must include the alcoholic beverage tax in the price shown on the menu.

However, nothing in the Tennessee Code Annotated or the Departmental rules and regulations, prevents the Taxpayer from separately itemizing the alcoholic beverage tax on the receipts they provide to their customers so long as the separately itemized alcoholic beverage tax is an accurate representation of the amount of the tax due.

For Further Information

Tennessee Department of Revenue – Letter Ruling #13-01