Exempt Uses – Food, Meals and Drinks

Giving away food, meals and beverages from your resale inventory isn’t subject to use tax in certain situations.

Employee meals

Retailers in the business of selling prepared food and beverages don’t owe use tax on the value of the food or beverages given to their employees.

This exemption applies only to prepared food and beverages given to employees. Prepared food and beverages sold to employees at a discount are taxable on the discounted price.

Prepared food

For this exemption, prepared food means food intended for human consumption that’s one or more of the following:

  • Heated when given away
  • Consists of two or more ingredients that the retailer combines and gives away as a single item
  • Is customarily served with utensils

Prepared beverage

For this exemption, prepared beverage means any beverage intended for human consumption.

Tastings or donations

Food and beverages given away as tasting samples aren’t subject to use tax in either of these cases:
  • The food or nonalcoholic sample you’re giving away is available for sale where you’re handing it out (e.g., grocery stores).
  • The wine or beer sample you’re giving away to a potential customer is the maximum serving allowed by Idaho and U.S. law, at a place that sells such beverages.
You don’t owe use tax on donations of food or beverages to individuals and current Idaho-registered nonprofit organizations.