Utah’s 1% restaurant tax now covers hot food at gas stations and grocery stores

Made-to-order food now costs more

If you order a fresh deli sandwich or a hot pizza at a Utah grocery store, convenience store, or gas station, you’re now paying a little extra.

A law called Senate Bill 91 took effect Jan. 1, 2026, and it expands the existing county-level 1% restaurant tax to cover “customized food” sold at these spots.

The tax lands on top of the regular sales tax already charged on prepared food. Regular grocery items like bread, milk, and produce are not affected.

The old rule left a gap

Before this change, the 1% restaurant tax only hit businesses that made most of their money selling prepared food. That meant traditional restaurants, fast-food chains, coffee shops, and caterers.

Grocery stores, gas stations, and convenience stores mostly got a pass, even when they sold hot or made-to-order meals.

The new law closes that gap by creating a separate category called “customized food,” which brings those items under the tax no matter where they’re sold.

“Customized food” has a specific definition

The law defines customized food as anything prepared or heated by the seller at a customer’s request for on-site or immediate eating. So a deli sandwich made to order at a grocery store now gets the tax.

The same goes for a pizza made fresh at a gas station.

But just asking for a specific amount of something, like a pound of sliced turkey from the deli case, doesn’t count as customization. The line comes down to whether the seller actually prepares or heats the food for you.

Grab-and-go items stay the same

Not everything at the store costs more. Pre-packaged items sitting on a shelf or in a cooler don’t fall under the new tax.

Regular grocery staples like fruits, vegetables, dairy, bread, and canned goods keep their lower 3% grocery tax rate.

A pre-made sandwich in a refrigerated case? No extra charge. And the law doesn’t change anything for traditional restaurants, which already collected the 1% tax. The change only targets that in-between category of store-prepared food.

Lawmakers passed the bill with little opposition

State Sen. Lincoln Fillmore, a Republican, sponsored the bill during the 2025 session. The Utah Senate passed it 25-0, and the House Revenue and Taxation Committee approved it 10-1.

Gov. Spencer Cox signed SB 91 into law on March 25, 2025, but set the start date for Jan. 1, 2026. That nine-month delay gave businesses time to update their systems and train staff on which items qualify.

Restaurants called it a fairness issue

The Utah Restaurant Association backed the bill, arguing that stores selling made-to-order food should pay the same taxes as restaurants.

Supporters said the marketplace has changed since the restaurant tax started in the early 1990s, with more retailers now preparing food for immediate eating.

The Utah Association of Counties said even small amounts of new local revenue can help rural communities. The Utah State Tax Commission confirmed it could handle the change without major issues.

Retail groups warned of compliance headaches

Not everyone was on board. The Utah Food Industry Association argued the law amounts to a tax increase on food.

Retail groups raised concerns about compliance, saying it could be tough for cashiers to figure out whether an item was made to order or not.

The Utah Petroleum Marketers and Retailers Association worried about audit risks for businesses that get it wrong. Some lawmakers also argued the state shouldn’t raise taxes on food at all.

The new revenue adds up to about $1 million

The state fiscal analyst estimated the law would bring in roughly $1 million in new revenue statewide. The bill’s sponsor said his own estimate was even lower.

And the money doesn’t go to the state. The restaurant tax is a county-level tax, so all the revenue stays local.

All 29 Utah counties currently collect the 1% restaurant tax, which means the new dollars get spread across the state rather than going into one big pot.

Counties spend the money on tourism and recreation

Counties use restaurant tax revenue to fund tourism, recreation, cultural facilities, convention centers, and airports.

In less populated counties, the money can also go toward services that handle tourism-related demands, like search and rescue, law enforcement, and emergency medical care.

Summit County, for example, uses its restaurant tax funds for local event grants, arts groups, and tourism marketing. The revenue stays in the county that collects it, so each area decides how to spend its share.

Utah already taxes food more than most states

Utah taxes grocery staples at a reduced statewide rate of 3%, which includes a 1.75% state portion and a 1.25% local portion. Prepared food gets taxed at the full combined sales tax rate, which can top 8% in some areas.

The 1% restaurant tax stacks on top of those rates.

There’s been an ongoing debate about removing the state’s 1.75% share of the grocery tax entirely, but lawmakers haven’t made that change permanent.

A new bill could scrap the restaurant tax altogether

In the 2026 session, Rep. Norman Thurston, a Republican, introduced House Bill 231, which would repeal the restaurant tax and replace it with a broader general sales tax.

Thurston argued the restaurant tax unfairly burdens working families who buy takeout meals. County leaders pushed back, saying repeal would hurt tourism-related grant programs they depend on.

As of late February 2026, the bill sat with the House Judiciary Committee, with no vote scheduled yet.

How to tell if you’re paying the extra tax

Here’s the simple test: if you order food made fresh at a grocery deli, gas station, or convenience store in Utah, you may see the 1% restaurant tax on your receipt.

If you grab a pre-made item from a shelf or cooler, it doesn’t apply. The difference comes down to whether someone prepared the food at your request.

The Utah State Tax Commission has updated its guidance to help both businesses and shoppers understand the new rules.

This article was created with AI assistance and human editing.

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