26 CAR § 31-104 – Exclusions from prepared food

(a) Prepared food does not include food that meets the criteria discussed below in subsections (b) and (c) of this section.
(b) Prepared food does not include food:
1. (1) That contains raw eggs, fish, meat, or poultry products that require cooking after the sale to prevent food-borne illnesses; and
2. (2) The customer generally cooks or heats after the sale. Example: A grocery store seasons raw meat, which is required to be cooked by the customer. The seasoned meat is food and taxed at the reduced state sales and use tax rate.
(c) Prepared food does not include food that is only cut, repackaged, or pasteurized by the seller, and such items are taxable at the reduced state sales and use tax rate. Example 1: Meat from a deli counter that is sliced and wrapped for a customer, deli salad that is purchased in large quantities by a supermarket and repackaged into smaller containers (without further preparation) for sale, or cantaloupe sliced by the seller and packaged into containers for sale. Example 2: A deli tray, cheese platter, mixed fruit, or similar item where the seller has mixed or combined two (2) or more food ingredients for sale as a single item is prepared food and is taxable at the full state sales and use tax rate. (See 26 CAR § 31-103(c))