A movie theatre in Vermont has contested an audit assessment that included the classification of the theatre as an “eating and drinking establishment” and assessments on sales of popcorn and nacho chips. The taxpayer argued that popcorn and nacho chips were excluded from the Vermont meals and rooms tax and that the theatre would not qualify as an “eating and drinking establishment” as they primarily sold packaged food. The court ruled against the taxpayer, finding that the exemption of popcorn and nachos was intended to apply only to packaged food and not prepared and warmed food. The law defining “eating and drinking establishments’ was also found to be broad enough to include the taxpayer’s theatre. It is also of note that the taxpayer was collecting taxes on non-bottled beverages, hot dogs and soft pretzels sold at their concession stands during the audit period. (Eurowest Cinemas, LLC v. Vermont Department of Taxes, Vermont Supreme Court, No. 2008-087, January 13, 2009)