Recently, the Nevada Supreme Court ruled that Nevada businesses are not liable for paying sales and use taxes on food served to customers or employees free of charge. In the particular case, a hotel and casino in Nevada regularly purchased large quantities of unprepared food to supply their various restaurants. The resort therefore, pays no sales tax on those purchases under the unprepared food exemption. Once the food was prepared, some of it was sold to customers (and taxed appropriately) and some was provided as complimentary meals to customers and employees. The resort erroneously paid use tax on the portion that was given away and subsequently filed a refund claim. The Court agreed with the taxpayer’s argument and was granted the refund based on the fact that from the point the unprepared food was purchased until the point where the complimentary meals were served no taxable action took place. (Sparks Nugget, Inc. v. The State of Nevada, Nevada Supreme Court, No. 45755, March 27, 2008)