City of Richmond Meals Tax: 7.5% Rate, Filing, and Penalties

The Richmond meals tax is a 7.5% local tax on prepared food and beverages sold inside the city, collected by the seller at the point of sale and sent to the city’s Department of Finance each month.¹ It applies whether the customer eats on the premises or takes the food to go, and it covers alcoholic drinks along with food.² This is a city tax that sits on top of Virginia’s state sales tax, so both appear on the customer’s bill and each is accounted for separately.

What the 7.5% Applies To

The rate is 7.5% of the total charge for the meal, calculated before tips but on the full price of all food and drink in the transaction.¹ The ordinance defines a “meal” as any prepared food or drink offered for sale that is ready for immediate consumption, regardless of what time of day it is served or what the menu calls it. “Food” is defined broadly to include food, nonalcoholic beverages, and alcoholic drinks sold by a food establishment.²

Who Has to Collect It

The city’s definition of a “food establishment” is wide. It includes restaurants, grills, coffee shops, cafeterias, snack bars, delis, bakeries, ice cream shops, breweries, bars, lounges, movie theaters, food trucks, pushcarts, drugstores, and private clubs, and it reaches outdoor patios and sidewalk cafés attached to those businesses.² If you sell prepared food to the public in Richmond, assume you need to collect.

Grocery stores, supermarkets, and convenience stores are generally not subject to the tax on their packaged goods, but any part of the store that sells prepared food and beverages is. A hot bar or a deli counter making ready-to-eat sandwiches triggers the collection duty for those items even while the rest of the store’s inventory stays outside it.¹

Caterers follow a licensing rule rather than a location rule. If your catering business is licensed in Richmond, the meals tax is owed on every event you serve, including events held outside the city. If your business is licensed outside Richmond, you do not owe Richmond’s meals tax even when you serve food within city limits.¹

What’s Exempt

A number of sales fall outside the tax. The exemptions matter both for sellers deciding what to tax and for buyers wondering why a particular bill looks the way it does.

On the off-premise side, factory-prepackaged snacks like candy, gum, nuts, chips, and crackers are exempt, as are doughnuts, cookies, and ice cream sold in more than single-serving sizes. Bulk food that is not portioned for immediate eating is exempt, and so are factory-sealed beverages, alcoholic or not. Food bought with federal SNAP or WIC benefits is exempt. Grocery-type items that qualify as home-consumption food under the federal Food Stamp Act are exempt as well, except for hot ready-to-eat food, sandwiches, salad bar items, prepackaged single-serving salads, and non-factory-sealed drinks, all of which remain taxable.¹ The working rule: if the item is hot or clearly portioned for eating now, expect it to be taxed.

Institutional meals are exempt when served to the people in the institution’s care. That covers public and private schools and colleges serving students or employees; hospitals, clinics, nursing homes, convalescent homes, and extended care facilities serving patients or residents; day care centers; homes for the aged, infirm, or disabled; shelters for domestic violence survivors; addiction recovery facilities; and age-restricted residential communities whose meal costs are included in rent and whose restaurants are not open to the public. Meals purchased and paid for by the federal government, the Commonwealth of Virginia, or a Virginia political subdivision are also exempt.³

Nonprofits get a limited fundraising exemption. Volunteer fire departments, volunteer EMS agencies, nonprofit churches and religious bodies, and educational, charitable, fraternal, or benevolent organizations can sell meals tax-free at the first three events in a calendar year. From the fourth event forward, only the first $100,000 in gross receipts, not counting those first three events, stays exempt, and the proceeds must go exclusively to nonprofit educational, charitable, benevolent, or religious purposes.³

A few other exemptions round things out. Restaurants do not owe the tax on meals they give their own employees at no charge as part of compensation. Churches that serve meals as a regular part of worship are exempt. Farmers market and roadside stand sellers are exempt if their total annual income from such sales across all locations is $2,500 or less. Vending machine sales are fully exempt. Meals that nonprofit charities provide to elderly, disabled, or needy people at home or at central feeding sites are exempt, along with meals served under state contracts offering concession-priced food to those same groups.³

Registration, Filing, and Payment

Before you make any sales, get a Richmond business license. Every person, firm, corporation, LLC, or other entity must have one before conducting business in the city, and new businesses have 30 days from their opening date to comply.⁴ Once the license is active, you will use your City of Richmond account number to register on the online payment portal and start filing meals tax returns.⁵

Returns and payments are due by the 20th of the month after the collection period. Tax collected in January is due February 20th.¹ If the 20th lands on a weekend or city holiday, the deadline moves to the next business day. File every month, even months when you collected nothing; skipping a filing is itself a violation.⁵ The city provides a monthly ATOM Taxes and TID Fee Coupon Form on its website for the paper option.

You can file and pay online through the Finance Online Payment Portal with your account number and an electronic payment method. For paper filing, mail the coupon and check to:

City of Richmond
PO Box 26505
Richmond, VA 23261-6505⁶

Keep your records. Every seller must retain documentation showing all taxable purchases, the amount charged each customer, the date of each sale, the tax collected, and the total tax that should have been collected. These records have to be preserved at least three years, and the Director of Finance can inspect them at any reasonable time.⁷

Penalties for Late Filing or Nonpayment

Miss the deadline and the city adds a penalty of 10% of the amount due or $10, whichever is greater. Interest runs at 10% per year on the unpaid balance, starting the first day of the month after the due date.¹ Even a modest monthly balance grows quickly with a flat penalty stacked on compounding interest.

There is a criminal side too. Because the meals tax is collected from customers and held in trust until remitted, the city treats unpaid meals tax as public money the business failed to turn over. Willfully failing to file, filing a fraudulent return, or failing to remit collected taxes is a Class 1 misdemeanor. If the amount involved is $1,000 or less, the charge is a Class 3 misdemeanor. Reporting taxable sales at 50% or less of the actual amount is prima facie evidence of intent to defraud the city.⁸

Owners and officers are personally exposed. Any corporate officer, partner, or other person responsible for collecting, accounting for, or paying the meals tax who willfully fails to do so can be charged with a Class 1 misdemeanor on top of other penalties. Each violation is a separate offense, and a conviction does not wipe out the underlying tax debt.⁸

1
City of Richmond. Meals Tax
2
Richmond, VA. Richmond Code of Ordinances – Meals Taxes, Section 26-668 Definitions
3
Richmond, VA. Richmond Code of Ordinances – Meals Taxes, Section 26-671 Exemptions
4
City of Richmond. Business, Professional, and Occupational License (BPOL) Tax
5
City of Richmond. Finance Online Payments
6
City of Richmond. Online Payments
7
Richmond, VA. Richmond Code of Ordinances – Meals Taxes, Section 26-673 Report of Taxes Collected
8
Richmond, VA. Richmond Code of Ordinances – Meals Taxes, Section 26-674 Failure or Refusal to File Return