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1. What is considered a “restaurant”?

A restaurant as defined within subdivision 9 of section 35.1-1 of the Code of Virginia is any place where food is prepared for service to the public on or off the premises.

Restaurants include but are not limited to:

Amusement parks	Hot dog stands
Billiard parlors	Lunchrooms
Bowling alleys	Mobile food services
Buffets	Nightclubs
Cafes	Office/Government cafeterias
Cafeterias	Public and private clubs
Caterers (Licensed in Charlottesville)	Push carts
Coffee shops	Short order places
Concession stands	Skating rinks
Delicatessens	Sporting venues
Dining rooms	Taverns
Health clubs	Theaters

Also included on a limited basis are:

• Bakeries - if there is a sit-down area
• Colleges and Universities when selling to non-students or non-employees
• Hospitals and Nursing Homes when selling to employees and the general public
• Industrial Cafeterias when selling to the general public

Food served from delicatessen counters at Convenience and Grocery Stores is also subject to the tax.

2. What is considered a “meal” that is subject to the Meals Tax?

A meal is any prepared food and beverages offered or held out for sale by a restaurant or caterer for the purpose of being consumed by an individual or group of individuals at one time to satisfy the appetite, whether prepared in such restaurant or not.

3. How is meals tax filed and assessed? When is Meals Tax due?

The current tax rate is 6.5%. Reports should be filed and tax paid by no later than the 20th of each month to avoid the levy of penalties and interest. When the 20th falls on a weekend or holiday, the due date is the first business day immediately following the 20th. Mailed filings must be postmarked by the due date to be considered timely. If the filing is paid late, there is a penalty of 5% of the tax due with a minimum penalty of $2.00. Interest will begin to accrue once the filing or payment is thirty days past due. If we have not received your filing by the end of the month, you will be notified by mail reminding you to file within seven days to avoid a statutory assessment wherein we levy an assessment based on the best available information at our disposal.

Please provide a valid e-mail address on the return.

If you conduct no sales in a given month, you must still file a zero dollar return by the 20th.

4. Can I file and pay online?

You may file and pay the following business taxes online by visiting our Online Business Tax Portal at www.charlottesville.gov/Online-Business-Portal

• Business License
• Meals Tax
• Lodging Tax
• Short-Term Daily Rental Tax
• Business Tangible Personal Property Tax (or Machinery and Tools)

Please familiarize yourself with the instructions and screens before proceeding to the portal itself.

If you have questions, call 434-970-3170 or email citycorbiz@charlottesville.gov.

5. What is the Seller’s Discount?

A 3% discount on the tax due is available for those who file and pay timely by the due date each month. If a filing is submitted by the due date but fails to include a payment, the discount will be disallowed and the tax due will be calculated at 6.5% with penalties and interest levied. You will be invoiced for the total amount due.

6. Does the meal, or prepared food, have to be consumed on the premises of the business where it is purchased to be taxable?

No. The meal, or prepared food, is subject to the Meals Tax whether it is intended to be consumed on the seller’s premises or elsewhere and without regard to the manner, time or place of service.

7. Does a caterer have to collect and remit Meals Taxes to the City of Charlottesville?

It depends. Yes, for a caterer whose business is located in the City of Charlottesville, regardless of the place of service of the prepared food. No, if the caterer’s business is located outside of the corporate limits of the City of Charlottesville and regardless of the place of service of the prepared food. The Meals Tax is based on the locality in which the caterer is subject to the local business license (BPOL) tax. Code of Virginia, §58.1-3841

8. Are beverages such as soda, beer, water and others that are in a can, bottle or other factory sealed container subject to the meals tax?

No, alcoholic and non-alcoholic beverages sold for off-premise consumption in factory sealed containers are exempt from the Meals Tax.  Charlottesville City Code §30-284.

9. Are there any exemptions to the Meals Tax?

Yes.  There are several, but the following are the most common types of purchases that are exempt from the Meals Tax:

• Food and beverages furnished by food establishments to employees as part of their compensation when no charge is made to the employee.*
• Meals when used or consumed and paid for directly out of public funds by the Commonwealth of Virginia, any political subdivision of the Commonwealth, or the United States.**
• Any sale of a meal which is exempt from taxation under the Virginia Retail Sales and Use Tax Act

In addition to the most common ones listed above, the following purchases of food and beverages are exempt from the Meals Tax:

• Food and beverages sold by day care centers, public or private elementary or secondary schools or food sold by any college or university to its students served on site and paid for as a part of a tuition, meal or similar plan.
• Food and beverages furnished by a hospital, medical clinic, convalescent home, nursing home, home for the aged, infirm, handicapped, battered women, narcotic addicts or alcoholics; or other extended care facility to patients or residents thereof and the spouses and children of such persons.
• Food and beverages furnished by a public or private nonprofit charitable organization or establishment or a private establishment that contracts with the appropriate agency of the Commonwealth to offer meals at concession prices to elderly, infirm, blind, handicapped or needy persons in their homes or at central locations.
• Food and beverages sold on an occasional basis, not exceeding six times per calendar year, by a nonprofit educational, charitable or benevolent organization; church; or religious body as a fundraising activity, the gross proceeds of which are to be used by such organization exclusively for nonprofit educational, charitable, benevolent or religious purposes.
• Food and beverages sold through vending machines.

The following items, when served exclusively for off-premise consumption, are exempt from the Meals Tax:

(1) Factory-prepackaged candy, gum, nuts and other items of essentially the same nature.

(2) Pastry, dairy and snack food items, such as doughnuts, ice cream sold in greater than single serving quantities, crackers, nabs, chips, cookies, and the like and items of essentially the same nature.

(3) Food sold in bulk.

(4) Alcoholic and nonalcoholic beverages sold in factory-sealed containers.

(5) Any food or food product purchased with food coupons issued by the United States Department of Agriculture under the Food Stamp Program or drafts issued through the state special supplemental food program for women, infants, and children.

(6) Any food or food product purchased for home consumption as defined in the federal Food Stamp Act of 1977, 7 USC 2012, as amended, except hot food or hot food products ready for immediate consumption.  The following items, whether or not purchased for immediate consumption, are excluded from the definition of food in the federal Food Stamp Act:  sandwiches, salad bar items sold from a salad bar, prepackaged single-serving salads consisting primarily of an assortment of vegetables, and nonfactory-sealed beverages.  Items (3), (4) & (5) are not affected by this item.

The following businesses are not subject to the Meals Tax, except for any portion or section of the business that contains prepared food and beverage operations:

• grocery stores
• supermarkets
• convenience stores

10. How do I claim exempt sales?

You must include documentation with your return in order for exemptions to be considered.  You will be notified by e-mail if any documentation is missing and be given five days to provide it.  Failure to provide the requested documentation will result in the tax being calculated on the total gross receipts without deducting any exemptions for the month.

11. Examples of documentation:

Virginia Retail Sales Tax Exempt Certificate – Customers requesting to make tax exempt purchases must provide you with one of the following…

• ST 10 (Items purchased for resale)
• ST 12 (Governmental Entity - City of Charlottesville, Albemarle County, Commonwealth of Virginia, Federal Government)
• ST 13 (Non-Profit Entity – 501(c)(3) entities designated by the IRS)

In addition to the certificate(s), transaction totals must be included as well.

*For employee meals, attach a monthly recap of totals.  This can be from Quickbooks or your point-of-sale system.

**When a governmental agency or non-profit organization claims an exemption, the bill must be paid with a check, credit card or purchase order in the name of the agency/organization for the exemption to be approved.  If an individual claims an exemption in the name of the agency/organization but pays with cash, a personal check, or their own credit card, the exemption is not valid and will be disallowed. 

Retail sales of items like gift cards, hats, t-shirts, bottles of wine, factory sealed beer or distilled spirits should be included in your total gross receipts on the return, but then deducted out.  Include a line item accounting of these type of sales and a monthly source recap.  For example:  HATS - $25.00, GIFT CARDS - $30.00, BOTTLED WINE: $65.00

12. Are gratuities subject to the Meals Tax?

The Virginia Code, § 58.1-3840, provides the following regarding gratuities:

No such taxes on meals may be imposed on:

(1) The amount paid by the purchaser as a discretionary gratuity; or

(2) That portion of the amount paid by the purchaser as a mandatory gratuity or service charge added by the restaurant in addition to the sales price of the meal, but only to the extent that such mandatory gratuity or service charge does not exceed 20% of the sales price; or

(3) Food and beverages sold through vending machines or on any tangible personal property purchased with food coupons issued by the United States Department of Agriculture under the Food Stamp Program or drafts issued through the Virginia Special Supplemental Food Program for Women, Infants, and Children.