The meals tax in question is not a tax that is charged to a business, it is one that is charged to my customers, just like a retail or food tax. The food tax, and not the meals tax, was the only tax that the King William County Commissioner of the Revenue (Sally Pearson) instructed me to collect when I received my business license in October, 2017. Since starting my business I have been collecting and submitting the food tax on every product I sell. I do not question the validity of the food tax.
After my business was up and running for 18+ months, the Commissioner then decided the Farm-To-Salad product should be charged an additional Meals Tax. I disagreed with her and asked for evidence to support this change in position. Based upon my review of the law, as well as other lawyers and associations that have reviewed my case, we do not believe it is a valid tax based based on the law as it was written over a decade ago.
It would be simple to just charge my customers this additional tax, and King William County has used this reasoning to try and resolve the matter. Rather than just roll over and and accept their argument without any evidence, I am standing up in defense of my customers. I do not believe the product I sell is required to be tax based upon the state or local King William meals tax code.
Sally Pearson has provided multiple justifications for the tax and each time I was able to dismiss them with little effort. If it can be shown to me how my product, and the structure of my business, qualifies for the tax, then I will comply.
This is a complex matter, and one that cannot be glossed over with assumptions. I will stand my ground in defense of my customers and what I feel is right.
In order to be taxable, a salad must meet the following definition as set forth in the State Code of Virginia § 58.1-3833 and is also provided in the King William Code of Ordinances Sec. 70-325.
"prepackaged single-serving salads consisting primarily of an assortment of vegetables"
The first part of this definition describes this product as a "single-serving". Serving size is clearly established by federal dietary guidelines and is not the same as a portion. These differences are described in this article.
"Serving size is a standardized amount of food. It may be used to quantify recommended amounts, as is the case with the MyPlate food groups, or represent quantities that people typically consume on a Nutrition Facts label. Portion size is the amount of a food you choose to eat — which may be more or less than a serving."
The salads I prepare typically weigh 15-17 ounces and most of my customers get multiple portions from the salad I deliver to them once a week. Do some eat them in a single sitting? Sure they do! However that does not make them a "single serving".
For example, a single serving of raw leafy greens is the equivalent of 1 cup. (reference) These salads typically have 4 cups of greens in addition to all of the other ingredients.
I even received an email from the King William Commissioner on Aug 8, 2019 that said, “My salad last night was delicious! My husband and I split it for dinner and we couldn’t eat it all Wish I could eat that clean every day.”
The second part of the description also exempts my product from the definition. These salads always contain ingredients that are not "vegetables". Including but not limited to, farm-made dressings, grains, seeds, nuts, cheese, and in some cases fruits or an egg.
By net weight, these salads do not consist "primarily of an assortment of vegetables".