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Is catering taxable? Catering sales tax by state, with the official source
Yes: in every state below, food sold by a caterer is subject to sales tax. The differences are in the lines around it — service charge, gratuity, delivery, rentals — and they are large. Here is what each state’s own tax guidance says, with a link to it. Not tax advice; it is the reading list for a short conversation with your CPA.
In every state on this page — Arizona, California, Colorado, Florida, Georgia, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Texas, Virginia and Washington — food sold by a caterer is taxable. Where they differ is everything around the food: whether a mandatory service charge or gratuity is taxed, whether delivery is, and whether rentals and serving labor are. The table is the short version, with state rates only — local rates come on top almost everywhere. Each state below has the detail and links to the official source it came from.
| State | State rate | Mandatory service charge or gratuity | Delivery |
|---|---|---|---|
| Arizona | 5.6% TPT, on the seller | Gratuities that are separately stated on the bill are left out of the tax base only if they are kept separate in your records and paid directly to employees; otherwise they are taxed. | Not addressed in the sources we checked. |
| California | 7.25% | A mandatory tip, gratuity or service charge is taxable; an optional one is not. | Not addressed in the sources we checked. |
| Colorado | 2.9% | Tips and gratuities, including banquet tips and tips added to the bill at a flat rate, are not taxable if all of it is paid to the people who actually provided the service. | Not taxable only if the customer could have chosen pickup instead and the charge is separately stated on the bill. |
| Florida | 6% | A gratuity is part of the taxable price unless it is separately stated as a gratuity or tip and the business receives no monetary benefit from it. | Not addressed in the sources we checked. |
| Georgia | 4% | Whatever it is called — tip, gratuity or service charge — an amount is mandatory and taxable if it was negotiated before the event, added to the bill by the seller, or added under a statement that it is required. | Taxable, even if itemized separately. |
| Massachusetts | 6.25% on meals | Service charges, gratuities or tips distributed to wait staff, service employees or service bartenders are excluded. | Not taxable if it is separately stated on the invoice, covers the cost of getting the food to the customer, and reasonably reflects that cost. |
| New Jersey | 6.625% | A tip or gratuity is not taxable only if it is separately stated, specifically designated as a gratuity or tip, and paid in full to employees. | Taxable. |
| New York | 4% | Voluntary tips are not taxable. | Not addressed in the sources we checked as a separate line; a caterer that only delivers, with no service after delivery, is taxed as a sale of food to go. |
| North Carolina | 4.75% | A service charge — including an automatic gratuity or a banquet catering service charge — is treated as a tip and not taxed if it is 20% or less, separately stated on the proposal or menu and on the invoice, and turned over to the staff directly involved in the service. | Taxable, even if billed or stated separately. |
| Pennsylvania | 6% | A voluntary tip, or a reasonable mandatory charge made in place of a tip, is not taxable. | Taxable under the general rule that tax applies to the full price with no deduction for delivery. |
| Texas | 6.25% | A mandatory gratuity — which may be called a service fee or service charge — of 20% or less is excluded if it is separated from the price, identified as a tip or gratuity, and paid out to the employees who serve. | Taxable, even when separately stated. |
| Virginia | 4.3% state + 1% local | A mandatory gratuity or service charge is excluded up to 20% of the price of the meal; anything above 20% is taxable. | Taxable when the caterer passes the charge on to the customer, according to a 2016 Tax Commissioner ruling (an older ruling treated separately stated delivery as exempt, so ask). |
| Washington | 6.5% | Voluntary tips are exempt. | Not addressed in the sources we checked. |
“Not addressed in the sources we checked” means exactly that: the official guidance we read does not answer it for caterers, so we have not guessed. Ask the state, or your CPA.
Three patterns worth knowing before the state detail
“Service charge” and “gratuity” are not interchangeable words. In New York a charge called a service charge is always taxable, while a mandatory gratuity that goes entirely to staff is not. Texas, by contrast, accepts “service charge” as a name for a gratuity, as long as it goes to the staff who serve. The word on your quote changes the tax. Why the two need separate lines.
Where the money goes decides the answer more often than the percentage. Most of these states exclude a mandatory gratuity only if all of it is paid out to the people who served. A charge the business keeps, even in part, is taxed.
Three states cap it at 20%. Texas, Virginia and North Carolina exclude a properly handled mandatory gratuity only up to 20%. Above that, Texas taxes all of it, while Virginia and North Carolina tax the part above 20%.
Georgia goes by how the charge is added, not what it is called. Anything negotiated in advance or added by you is mandatory and taxable there, whether it says tip, gratuity or service charge.
Is catering taxable in Arizona?
Rate. Arizona has no sales tax on the buyer; it has a transaction privilege tax (TPT) on the seller, 5.6% at the state level plus county and city rates, which a business may pass on to its customers.
Food. Taxable. Catering is listed in the restaurant classification of the TPT.
Service charge and gratuity. Gratuities that are separately stated on the bill are left out of the tax base only if they are kept separate in your records and paid directly to employees; otherwise they are taxed.
Delivery. Not addressed in the sources we checked.
Rentals and serving labor. Taxable: the Department of Revenue counts charges for dishes, silverware, glasses, chairs and tables, and the labor of serving, as part of a caterer’s gross income.
Official sources:
- A.R.S. § 42-5074, restaurant classification
- A.A.C. R15-5-1708, gratuities
- Ruling TPR 93-30, catering services
- TPT rate tables
Is catering taxable in California?
Rate. 7.25% statewide, plus district taxes in most areas.
Food. Taxable. Charges for preparing and serving food and beverages are taxable.
Service charge and gratuity. A mandatory tip, gratuity or service charge is taxable; an optional one is not. For banquets, a gratuity agreed in advance counts as mandatory.
Delivery. Not addressed in the sources we checked.
Rentals and serving labor. Taxable, whether separately stated or not: tableware, chairs, tables and linens used to serve the food, and serving labor, including by a subcontractor.
Official sources:
- CDTFA Publication 22, Dining and Beverage Industry
- Regulation 1603(h), tips and service charges
- CDTFA Tax Guide for Caterers
- Sales and use tax rates
Is catering taxable in Colorado?
Rate. 2.9% state rate, plus state-administered local taxes. Home-rule cities collect their own sales tax separately.
Food. Taxable. Caterers are taxed in the same way as any other dining establishment.
Service charge and gratuity. Tips and gratuities, including banquet tips and tips added to the bill at a flat rate, are not taxable if all of it is paid to the people who actually provided the service. Any part not distributed is taxable.
Delivery. Not taxable only if the customer could have chosen pickup instead and the charge is separately stated on the bill.
Rentals and serving labor. A Department information letter (not binding) says separately stated labor for waiters, cooks and dishwashers is likely taxable. Rentals are not addressed in the sources we checked.
Official sources:
Is catering taxable in Florida?
Rate. 6% state rate, plus a county discretionary surtax in many counties.
Food. Taxable. Florida’s rule on food service covers caterers, and treats the place where catered meals are served as the caterer’s premises.
Service charge and gratuity. A gratuity is part of the taxable price unless it is separately stated as a gratuity or tip and the business receives no monetary benefit from it. Service charges, minimum charges, corkage and setup fees charged as part of furnishing or serving food are taxable.
Delivery. Not addressed in the sources we checked.
Rentals and serving labor. Setup fees are taxable (see above). Rentals billed by the caterer are not addressed in the sources we checked.
Official sources:
Is catering taxable in Georgia?
Rate. 4% state rate, plus local taxes.
Food. Taxable. Catering establishments are covered by the rule for restaurants, and prepared food is subject to state and local tax.
Service charge and gratuity. Whatever it is called — tip, gratuity or service charge — an amount is mandatory and taxable if it was negotiated before the event, added to the bill by the seller, or added under a statement that it is required. It is optional and not taxable only if the bill, menu or signage clearly says it is optional and can be removed.
Delivery. Taxable, even if itemized separately.
Rentals and serving labor. Services necessary to complete the sale are taxable even if itemized (a required bartender, for example); optional services itemized separately are not. Rentals billed to the customer are not addressed in the sources we checked.
Official sources:
Is catering taxable in Massachusetts?
Rate. 6.25% sales tax on meals, plus a 0.75% local option meals excise in cities and towns that adopted it (7% in total).
Food. Taxable. Catering businesses are treated as restaurants.
Service charge and gratuity. Service charges, gratuities or tips distributed to wait staff, service employees or service bartenders are excluded. A service charge kept by the business, or paid only in part to staff, is taxable.
Delivery. Not taxable if it is separately stated on the invoice, covers the cost of getting the food to the customer, and reasonably reflects that cost.
Rentals and serving labor. Taxable: setup at the customer’s location, serving, bartending, clean-up, and rental of linens, chairs, tables, dishware and glasses. Optional unrelated services such as valet parking or music are not.
Official sources:
Is catering taxable in New Jersey?
Rate. 6.625% (reduced rates apply in Urban Enterprise Zones and Salem County for some sales).
Food. Taxable, whether the food is eaten on the caterer’s premises or delivered to the customer.
Service charge and gratuity. A tip or gratuity is not taxable only if it is separately stated, specifically designated as a gratuity or tip, and paid in full to employees.
Delivery. Taxable. Delivery charges imposed by the seller are part of the sales price.
Rentals and serving labor. Labor and services needed to complete the sale are part of the taxable sales price. Rentals billed by the caterer are not addressed in the sources we checked.
Official sources:
Is catering taxable in New York?
Rate. 4% state rate, plus local tax that differs by city and county.
Food. Taxable. In general, all of a caterer’s charges related to a customer’s event are taxable.
Service charge and gratuity. Voluntary tips are not taxable. A mandatory gratuity is not taxable only if it is shown separately, identified as a gratuity, and all of it goes to employees. A charge labelled service charge is always taxable.
Delivery. Not addressed in the sources we checked as a separate line; a caterer that only delivers, with no service after delivery, is taxed as a sale of food to go.
Rentals and serving labor. Taxable, even when tables, chairs, tents, linens and similar items are listed separately on the bill. Wait staff and bartenders you hire in are billed to the customer with tax.
Official sources:
Is catering taxable in North Carolina?
Rate. 4.75% state rate, plus local and, in some counties, transit rates.
Food. Taxable. All charges connected with furnishing, preparing or serving food or drink are part of the taxable price.
Service charge and gratuity. A service charge — including an automatic gratuity or a banquet catering service charge — is treated as a tip and not taxed if it is 20% or less, separately stated on the proposal or menu and on the invoice, and turned over to the staff directly involved in the service. The part above 20% is taxable, and if any of it goes to staff who did not serve, all of it is taxable.
Delivery. Taxable, even if billed or stated separately.
Rentals and serving labor. Taxable, even if separately stated: chairs, linens, tables and flatware, and bartending and carving (except separately stated bartending for alcohol the customer supplied).
Official sources:
Is catering taxable in Pennsylvania?
Rate. 6% state rate, plus 1% in Allegheny County and 2% in Philadelphia.
Food. Taxable. The sale of food and beverages by a caterer is subject to tax.
Service charge and gratuity. A voluntary tip, or a reasonable mandatory charge made in place of a tip, is not taxable. A service charge that is not in lieu of a gratuity is taxable.
Delivery. Taxable under the general rule that tax applies to the full price with no deduction for delivery.
Rentals and serving labor. Taxable, including separately stated charges for tables, chairs, decorations, utensils, bartenders and food servers. Separately stated liquor is not taxable to the customer.
Official sources:
- 61 Pa. Code § 60.7, Prepared food
- REV-717, Retailer’s Information (catering services)
- Sales Tax in the Restaurant Industry
Is catering taxable in Texas?
Rate. 6.25% state rate, plus up to 2% local (8.25% at most).
Food. Taxable. A caterer must collect tax on all charges billed in connection with the sale of taxable meals.
Service charge and gratuity. A mandatory gratuity — which may be called a service fee or service charge — of 20% or less is excluded if it is separated from the price, identified as a tip or gratuity, and paid out to the employees who serve. Over 20%, all of it is taxable. Voluntary tips are excluded.
Delivery. Taxable, even when separately stated.
Rentals and serving labor. Taxable, including separately stated charges for preparing and serving, the room, and reusable tables, chairs, tableware and tablecloths.
Official sources:
- Rule 3.293, Food; Food Products; Meals; Food Service
- Rule 3.337, Gratuities
- Publication 94-105, local sales and use tax
Is catering taxable in Virginia?
Rate. 5.3% in most of the state (4.3% state plus 1% local), and more in some regions, such as 6% in Northern Virginia, Hampton Roads and Central Virginia and 7% in the Historic Triangle.
Food. Taxable. Caterers selling meals collect the tax.
Service charge and gratuity. A mandatory gratuity or service charge is excluded up to 20% of the price of the meal; anything above 20% is taxable. Voluntary tips are not taxable.
Delivery. Taxable when the caterer passes the charge on to the customer, according to a 2016 Tax Commissioner ruling (an older ruling treated separately stated delivery as exempt, so ask).
Rentals and serving labor. Bartender and waiter charges are taxable. Plates, glasses and tablecloths the caterer has already paid tax on are not taxed again when rented to the customer; a tent rented as part of the event is part of the taxable charge.
Official sources:
- Va. Code § 58.1-602, mandatory gratuities
- 23VAC10-210-930, Meals
- Ruling 15-10 (caterer, 20% limit)
- Ruling 16-194 (delivery and serving items)
- Ruling 01-225 (bartenders and waiters)
- Retail sales and use tax rates
Is catering taxable in Washington?
Rate. 6.5% state rate, plus a local rate by city and county.
Food. Taxable. Caterers collect retail sales tax on their total charge for catering.
Service charge and gratuity. Voluntary tips are exempt. A gratuity the business adds to the bill is taxable.
Delivery. Not addressed in the sources we checked.
Rentals and serving labor. The total taxable charge includes meals, equipment, decorations and the catering service.
Official sources:
States that are not on this page
We only list a state after reading its own revenue department guidance or rules, and we leave a question blank rather than fill it from a summary. If your state is missing, start with its department of revenue’s publication for restaurants or caterers, and the general questions in is catering taxable where you are.
This is not tax advice. Rates change, local rates apply on top, and rules depend on details of your invoices that a summary cannot see. Use this page to ask your CPA the right questions, and check the linked source for the current text.
What this means for your website
On a Catering Deck site, whether tax applies to food, to the service charge and to delivery are three separate switches, set once for your state and applied to every line of every quote. The service charge and the gratuity are separate lines, each with its own sentence of explanation.
Price it first with the free price per person calculator, which lets you choose which lines are taxed.