Nevada – Exemption for Complimentary Meals

SALT Report 2604 – The Nevada General Assembly enacted legislation that amends the provisions regarding the sales and use tax exemption for food, meals, and nonalcoholic drinks that are provided on a complimentary basis. Prior to the amendment, the State’s law only exempted food for human consumption from sales and use taxes and specifically excluded prepared food intended for immediate consumption.

However, because of a 2008 decision by the Nevada Supreme Court in which they determined that under the provisions of the food exemption, a business entity is exempt from paying use taxes on prepared food intended for immediate consumption when the business entity provides it to its employees and patrons free of charge.

As a result of that ruling, the General Assembly passed AB 506 which provides that when consideration is not received for the complimentary portion of any food, meals, or nonalcoholic drinks provided on a complimentary basis to employees, patrons or guests of the business, sales tax does not apply.

Additionally, the Bill provides that the complimentary portion of any food, meals, or nonalcoholic drinks provided to employees, patrons or guests of a retailer, does not lose its status as food for human consumption and is exempt from use tax.

The exemption was effective June 13, 2013.

For Further Information

Nevada General Assembly – Assembly Bill 506, Laws 2013