Ruling Request No. 92-08

Declaratory Rulings

Ruling Request No. 92-08

Re: Determination of Tax Measure under Sales/Use Tax Law

Request for Ruling

You request a ruling on behalf of your client, a Warwick caterer, as to the appropriate tax measure under the following set of facts.


A Warwick caterer provides food products to airlines at the State airport. As a requirement to do business at the airport, the State of Rhode Island, Department of Transportation, Airport Division, requires the caterer to pay the state a fixed percentage (8%) of its gross sales to the airlines ("port fees").

When the caterer bills the airlines for the food products, it adds to the invoice, and separately states thereon, the so-called port fees which it is required to pay to the Department of Transportation, Airport Division.

Ruling Requested

The caterer requests a ruling that it is correctly imposing and collecting a sales tax on the total amount charged to the airlines, i.e., food products plus port fees.


The pertinent provisions of the sales and use tax law read in part as follows:

44-18-7. Definitions.-- (1) "Sales" means and includes:

* * *

(D) The furnishing, preparing, or serving for a consideration of food, meals, or drinks, including any cover, minimum, entertainment, or other charge in connection therewith. (emphasis added)

* * *

44-18-12. "Sales price" defined. -- (1) "Sales price" means the total amount for which tangible personal property is sold or leased or rented...

* * *

44-18-13. "Gross receipts" defined. -- "Gross receipts" means the total amount of the sales price, as defined above, of the retail sales of retailers.

44-18-18. Sales tax imposed. -- A tax is hereby imposed upon sales at retail in this state, as herein defined, including charges for rentals of living quarters in hotels, rooming houses, or tourist camps, at the rate of six percent (6%) of the gross receipts of the retailer from the sales or rental charges, provided, however, that the tax imposed on charges for the rentals shall apply only to the first period of not exceeding thirty (30) consecutive calendar days of each rental; provided further, however, for the period commencing July 1, 1990 the tax rate shall be seven percent (7%)... (emphasis added)

According to the statutory scheme set forth above, a retailer must collect and remit the tax as measured by its gross receipts. In the facts set forth herein, the gross receipts include the port fees passed on to the airline by the caterer.


The caterer is required to impose and collect a sales tax on the total amount charged (i.e., gross receipts) to the airlines.

This ruling may be relied upon by this taxpayer and shall be valid until the applicable statutory provisions are amended in a manner requiring a different result or until the underlying factual presentation changes.

R. Gary Clark

Tax Administrator

October 23, 1992