Regulatory changes to tax code and liquor regulations included among 2014 HERO Manual updates

Regulatory changes to tax code and liquor regulations included among 2014 HERO Manual updates

By Tony Buhr, contributing editor

If politics existed as a state, it would be a liquid.

The rules and laws that govern us constantly adapt and change. Because of this, organizations like the WRA exist, to help represent and inform constituents about changes that affect their lives and businesses.

The WRA’s HERO Manual is one tool that has proven invaluable in helping to notify members about legislative and regulatory changes, allowing them to remain compliant and successful.

This year, we saw changes in Washington’s tax code, food service requirements for spirits, beer and wine, and with growlers.

In regards to Washington’s tax code, restaurant owners can look forward to some relief coming in the form of exemptions. In last year’s legislative session, state lawmakers provided business and occupation tax exemptions for places that provide payroll and human resource services to affiliated companies, and for dairy products used to make other dairy products.

Also restaurants will see relief from sales tax exemptions for cover charges on places that provide dancing or pay-per-view shows. The legislature also passed a sales tax exemption on products that produce flavor while being consumed during the cooking process. These products include charcoal, cedar chips and other similar items.

Unfortunately, the Washington Department of Revenue has made alterations to regulations involving sales tax collected on prepared food. Previously, any prepared foods sold by a business would be exempt from sales taxes. But now, businesses whose food sales consist 75 percent or more of prepared food items must collect sales tax for their total sales, prepared foods included.

However, in order to make this even more confusing, the DOR has made an exemption to its 75 percent criteria. Single food items containing four or more servings can be exempted. Unless the customer receives a utensil any time during the purchase of the single item of four or more servings, then sales tax must be collected.

Washington also underwent major changes with its liquor regulations this year. Restaurants that want to serve spirits, beer or wine must offer at least eight complete meals on their menu. The state defines complete meals as containing an entrée and at least one side dish. It further explains that an entrée cannot be a reheated, precooked/frozen item, or a carry-out item from another business.

In order for a restaurant to be compliant, its kitchen must have the equipment necessary to prepare its eight meals, a chef on hand, a menu available, the ingredients on premise, and the meal must be made on the premise.

Restaurants with 100 percent dedicated dining area must maintain service the entire time liquor is served. But businesses whose dining area doesn’t make up 100 percent of its business must serve meals only five hours a day between 8 a.m. and 11 p.m., five days a week.

Finally, in regards to growlers, taverns and restaurants selling spirits, beers and wines can now sell growlers-to-go on premise.

These changes will be included in the 2014 HERO Manual updates, but may not be the only edits made. With lawsuits regarding a tip credit still in the works and other precedents constantly being set, the WRA remains ready to adapt to an ever-changing regulatory landscape.

Check out the HERO Manual here.

(Source: Washington Restaurant Magazine, January 2014)

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Tags: HERO Manual