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Guidelines for Bakery Items

Step 1: Determine if the activity on the premises qualifies the operator to be a "restaurant ". A restaurant is defined by RSA 78-A:3 X (b) as:

A "restaurant" means an eating establishment where food, food products, or beverages including alcoholic beverages are served and for which a charge is made. The term includes, but is not limited to, a cafe, lunch counter, private or social clubs, diner, snack bar, dining room, food vending machine, and any other eating place or establishment where meals are served, even if the service of a meal is not the primary function of the establishment such as but not limited to convenience stores, gas stations, or supermarkets, but only as to the portion of such establishment that serves a Ameal@ as defined in this chapter. The term includes eating establishments whether stationary or mobile, temporary or permanent. (Emphasis added.)

Simple Bakery: A simple bakery is a bakery [or the bakery section of a store] that does not qualify as a restaurant. A simple bakery is one that does not sell taxable meals. It cannot, therefore, sell taxable coffee or any taxable beverages. A simple bakery cannot sell sandwiches of any kind or any other product that would meet the definition of a taxable meal. All bakery products sold by a simple bakery are not taxable. If the bakery or the bakery section of a store does sell any taxable meals, then the bakery would be classified as a "restaurant type bakery" and the bakery products sold would be considered taxable meals.

Restaurant Type Bakery: A restaurant type bakery [or the restaurant type bakery section of a store] is one that, in addition to bakery products, sells taxable meals. That is, a restaurant type bakery [or the restaurant type bakery section of a store] might sell taxable coffee or juice, or croissant sandwiches, or any other product that would be a "taxable meal". Once the bakery, or the bakery portion of a store, does sell any product that is taxable, then the facility or that section of the facility is classified as a restaurant.

All food and/or all beverages sold by a restaurant type bakery are taxable except:

a. Items sold for 35 cents or less;
b. Items that are wholly packaged off the premises and are sold in their original unopened container (except sandwiches), such as but not limited to canned soda or vending-type coffee cake;
c. All single serving bakery products sold in a quantity of six or more, such as but not limited to donuts, cookies, brownies, or bagels; or
d. Whole, multiple serving bakery products, such as but not limited to cakes, pies, or bread.

Step 2: Maintain documentation necessary to differentiate between the sale of taxable and non-taxable items.

Department of Revenue personnel are available to walk through your premises to help you identify taxable and non-taxable products and to answer any questions you may have. please be advised that any change in your operation may change the classification of your products.

Please Note: The following facts do not affect the classification of a bakery, or the bakery section of a store, as simple bakery or restaurant type bakery: whether or not seating facilities are available, if the items are served "to go" or are intended for on-premise consumption, if an item is sold with or without a beverage, and the method or location of payment.

This guideline was revised July 15, 1999 by the New Hampshire Department of Revenue Administration and is based on the laws and regulations in effect July 15, 1999. Any change in the laws or the regulations may render this guideline obsolete. If you have any questions, please call the New Hampshire Department of Revenue Administration, Audit Division, at (603) 230-5030.



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