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(a) The tax rate shall be at an amount equal to two and six-tenths (2.6) percent of the gross income from the business activity upon every person engaging or continuing in the business of preparing or serving food or beverage in a bar, cocktail lounge, restaurant, or similar establishment where articles of food or drink are prepared or served for consumption on or off the premises, including also the activity of catering. Cover charges and minimum charges must be included in the gross income of this business activity. (Reg. 445.1)
(b) Caterers and other taxpayers subject to the tax who deliver food and/or serve such food off the premises shall also be allowed to exclude separately charged delivery, setup, and cleanup charges, provided that the charges are also maintained separately in the books and records. When a taxpayer delivers food and/or serves such food off the premises, his regular business location shall still be deemed the location of the transaction for the purposes of the tax imposed by this section.
(c) The tax imposed by this section shall not apply to sales to a qualifying hospital, qualifying community health center or a qualifying health care organization, except when sold for use in activities resulting in gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512.
(d) The tax imposed by this section shall not apply to sales of food, beverages, condiments and accessories used for serving food and beverages to a commercial airline, as defined in A.R.S. § 42-5061(A)(49), that serves the food and beverages to its passengers, without additional charge, for consumption in flight.
(e) The tax imposed by this section shall not apply to sales of prepared food, beverages, condiments or accessories to a public educational entity, pursuant to any of the provisions of Title 15, Arizona Revised Statutes, to the extent such items are to be prepared or served to individuals for consumption on the premises of a public educational entity during school hours.
(f) For the purposes of this section, “accessories” means paper plates, plastic eating utensils, napkins, paper cups, drinking straws, paper sacks or other disposable containers, or other items which facilitate the consumption of the food.
(g) Notwithstanding the tax rate identified elsewhere in this section, an additional tax in an amount equal to one-tenth of one (0.1) percent of the gross income from any business activity taxable under this section is imposed pursuant to Chapter IV, Section 5 of the Charter of the City of Tucson.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 6938, § 13, 4-25-88; Ord. No. 9069, § 1(9), 6-15-98; Ord. No. 10361, § 9, 12-19-06; Ord. No. 11479, § 1, 8-8-17; Ord. No. 11485, eff. 8-8-17; Ord. No. 11518, eff. 1-23-18)