How Asheville's Excise Tax Works on Your Purchase
Asheville charges an excise tax on certain goods in addition to the standard North Carolina sales tax. The excise tax is a separate line item on your receipt — it is not included in the price tag. To calculate what you will pay, you multiply the purchase price by the excise tax rate for that category, then add that amount to the sales tax you already owe.
The most common excise tax in Asheville is on prepared food and beverages. If you buy a meal at a restaurant or a drink at a bar, the city adds a percentage on top of the state sales tax. The exact rate depends on what you are buying and when the tax was last updated by the city council. Other goods — such as certain recreational items — may also carry an excise tax, but prepared food is what most residents encounter.
The calculation itself is straightforward arithmetic, but the tricky part is knowing which items are taxed and at what rate. Asheville's rates change periodically, and different categories have different percentages. A receipt from a restaurant will show the breakdown, but if you are budgeting before you buy, you need to know the current rate for that category.
Key Takeaways
- Asheville's excise tax is added on top of North Carolina's state sales tax, not instead of it, so you pay both.
- The most common excise tax applies to prepared food and beverages sold at restaurants, bars, and food trucks.
- Excise tax rates are set by the city and change when the city council votes to adjust them, so the rate you paid last year may not be the rate today.
- Your receipt will show the excise tax as a separate line, making it straightforward to see exactly how much the city charged.
- The formula is: (purchase price) × (excise tax rate) = excise tax amount, then add that to the sales tax to get your total.
The Basic Calculation Formula
The math is straightforward once you know the rate. Take the price of what you are buying, multiply it by the excise tax percentage, and that is the excise tax you owe. Then add both the excise tax and the sales tax to the original price to find your total.
For example: if you buy a $20 meal and Asheville's excise tax on prepared food is 4 percent, the excise tax is $20 × 0.04 = $0.80. North Carolina's state sales tax is 4.75 percent, so that is $20 × 0.0475 = $0.95. Your total is $20 + $0.80 + $0.95 = $21.75. The receipt will show each tax separately so you can verify the math.
If you are buying multiple items with different tax rates — for instance, a prepared meal (taxed) and a bottle of water (usually not taxed) — you calculate the excise tax on only the items that are subject to it. The cashier's register does this automatically, but understanding the logic helps you spot errors on your receipt.
Where to Find Asheville's Current Excise Tax Rates
Asheville's excise tax rates are published by the city's Finance Department and are available on the City of Asheville's official website. The rates are organized by category — prepared food, beverages, and any other taxed goods — and include the effective date of each rate.
Because city councils can vote to change tax rates, the rate you see today may not be the rate next year. If you are planning a budget or comparing costs, check the current rates rather than relying on what you remember paying. The city's website will have the most recent version, and it will tell you when that rate took effect.
If you cannot find the rate online or the website is unclear, you can contact the Asheville Finance Department directly by phone or email. They can tell you the current rate for the specific item you are asking about and whether it has changed recently. Many restaurants and food vendors also post the rates on their websites or menus.
Excise Tax on Prepared Food Versus Groceries
Asheville taxes prepared food — meals cooked and served at restaurants, food trucks, and bars — but does not tax groceries you buy at a supermarket to cook at home. This distinction matters because the same item can be taxed or not depending on where you buy it and whether it has been prepared.
A rotisserie chicken from a grocery store deli counter is usually considered prepared food and is taxed. A raw chicken from the butcher section is not. A sandwich from a restaurant is taxed. A loaf of bread from the bakery aisle is not. The rule is whether the item was cooked or assembled for when ready consumption, not whether it is hot or cold.
Beverages follow the same logic. A soda you buy at a restaurant or bar is taxed. A soda you buy from a grocery store shelf is not. Coffee from a café is taxed. Coffee beans you buy to brew at home are not. If you are unsure whether something counts as prepared food, the safest approach is to assume it does if you are buying it from a place that serves food.
What Happens If the Tax Rate Changes Mid-Year
When Asheville's city council votes to change an excise tax rate, the new rate takes effect on a specific date — usually the first of a month. Purchases made before that date use the old rate. Purchases made on or after that date use the new rate. Your receipt will show which rate was applied based on the date of your purchase.
If you buy something the day before a rate increase, you pay the lower rate. If you buy the same item the day after, you pay the higher rate. Businesses have to update their registers and menus on the effective date, so there is usually a clear cutoff. If you see a sudden jump in the tax on your receipt compared to last week, check whether a rate change took effect.
The city publishes rate changes in advance, so you can plan if you know a change is coming. However, most people do not track tax rate changes, so you will likely notice it only when you see it on a receipt or a menu board.
How to Verify the Excise Tax on Your Receipt
Every receipt from a taxed purchase should show the excise tax as a separate line item. It will be labeled as "excise tax," "local tax," or something similar, and it will show the dollar amount charged. You can verify this is correct by checking that the amount matches the formula: purchase price × current rate = excise tax shown.
If the excise tax on your receipt does not match what you calculate, the error could be in the rate used, the purchase price, or the register itself. Most errors are honest mistakes in the register setup. If you catch an error, you can ask the cashier or manager to recalculate. Keeping your receipt makes this easier because you have proof of what was charged.
If you notice a pattern of incorrect taxes at the same business, you can report it to the Asheville Finance Department. They investigate complaints and can require a business to refund overcharges. However, most modern registers are programmed correctly, so errors are uncommon.
Excise Tax on Alcohol and Other Beverages
Alcoholic beverages sold at bars and restaurants are subject to Asheville's excise tax on prepared beverages. Beer, wine, and spirits all count. The tax applies to the full price of the drink, including any mixers or garnishes. Non-alcoholic beverages — soda, juice, coffee, tea — are also taxed when sold at a restaurant or bar.
The rate for beverages may be different from the rate for prepared food, so check the current rates if you want to know the exact amount. A $10 cocktail and a $10 meal may have different excise tax amounts if the city sets different rates for drinks and food.
Alcohol purchased from a liquor store or grocery store for off-premises consumption is not subject to Asheville's excise tax. You pay the state sales tax but not the city excise tax. The difference is whether the business is serving it to you on-site or selling it for you to take home.
Frequently Asked Questions
Is the excise tax included in the price shown on the menu?
No. Menu prices are almost always before tax. The excise tax and sales tax are added at the register when you pay. Your receipt will show the menu price, then the taxes added, then your total. This is why the amount you pay is higher than the menu price.
Do I pay excise tax on takeout food?
Yes. Takeout is still considered prepared food, so it is subject to Asheville's excise tax. Whether you eat it in the restaurant or take it home, the tax applies. The only way to avoid the excise tax is to buy unprepared groceries.
What if a business charges me the wrong excise tax rate?
Check your receipt against the current rate published by the City of Asheville. If the amount is wrong, ask the business to correct it. If they refuse or if you see the same error repeatedly, contact the Asheville Finance Department with your receipt as proof.
Does Asheville's excise tax explore to food delivery services?
Yes. If a restaurant or food service prepares the food, the excise tax applies whether you pick it up, have it delivered, or eat it on-site. The delivery fee itself is usually not taxed, but the food is.
Can I deduct Asheville's excise tax on my income taxes?
Excise taxes paid on personal purchases are not deductible on your federal income tax return. If you are self-employed and buy meals for business purposes, you may be able to deduct the meal cost, but the tax treatment is the same as it would be without the excise tax.