The sales tax holiday provisions adhere to the definitions of “restaurant” and “limited service restaurant” located in Tenn. Code Ann. § 57-4-102.
“Restaurants” are defined in part as establishments that serve meals and drinks to patrons and have a seating capacity of at least 40 patrons. “Limited service restaurants” are defined in part as establishments that sell alcoholic beverages and food and have a seating capacity of at least 40 patrons, with a majority of revenue being derived from the sale of alcoholic beverages. For complete definitions of qualifying establishments, please see Tenn. Code Ann. § 57-4-102.
Businesses who do not meet the definition of either “restaurant” or “limited service restaurant” should collect and remit sales tax on sales during this period.