General Policy

The university's hospitality policy permits the purchase of food and beverage services for allowable university events. In contrast to the university's normal tax-exempt status, however, the State of Indiana says that under most circumstances, "food and beverage services are never considered to be used for the purpose for which an organization might otherwise be granted sales tax exemption." This means that the university must pay sales tax and the Allen County food and beverage tax on prepared foods and beverages provided by caterers, restaurants, groceries, and other food service providers.

The tax liability extends only to the sales price of foods and beverages. The university is not taxable on service charges, delivery charges, equipment rentals and other miscellaneous charges. If the food service provider assesses a gratuity on an order, however, the gratuity is to be considered a cost of the food and beverages and subjected to sales and food and beverage tax.

When ordering catering services, departments should inform the caterer that the university is taxable only on the cost of the food and beverages and that we require an itemized invoice that separates charges for food, beverages, delivery charges, service charges, rentals and other charges.

The basis of this policy is Indiana Department of Revenue Sales Tax Information Bulletin #7.