In February of 2012, the Tax Commission ruled that certain complimentary food and employee meals are subject to sales tax. Based on that decision, the Nevada Supreme Court’s guidance in Sparks Nugget, and the existing statutory scheme (e.g. NRS 372.060(3)(c)), the Department informed affected businesses that these meals are subject to sales tax as of February 15, 2012 but not due and payable until July 31, 2012.
Moreover, the Nevada Tax Commission on June 25, 2012 adopted a regulation, LCB File No. R057-12, which defined “consideration” and the taxable measure for these types of meals.
Because the Legislative Commission has not had the opportunity to approve the regulation and because there are several ongoing appeals that have not been heard by the Tax Commission and the Nevada Supreme Court, the Department is updating its guidance as follows:
As previously stated by the Department, certain complimentary food and employee meals remain taxable as of February 15, 2012. However, sales tax is now due and payable without penalty or interest the earlier of: (1) the last day of the next month following approval of the regulation by the Legislative Commission; (2) the last day of the next month following a Nevada Supreme Court decision relating to or affirming that complimentary and/or employee meals are subject to sales tax; (3) the effective date of any legislation; or (4) June 30, 2013.
Please note that the taxable measure remains the same: For complimentary food, it is the retail value of the meal. For employee meals, it is the cost of the individual food components of the meal.