A summer audit of Subway in the Martin Luther King Jr. University Union has caused the university to tax purchases from the union’s food court.

Illinois State Revenue Department officials, who conducted the audit, disagreed with the Subway receipts and asked why tax hasn’t been charged.

Food from the residence hall dinning centers is not taxable, and Eastern considers the food court an extension of the dining centers, said Mark Hudson, director of housing and dining.

The state started collecting sales tax from the food court in August. The decision was made the day before the dining centers opened.

The plan was to implement the tax and “just see what happens,” Hudson said.

Eastern requested a waiver for the tax. It will take six months before the Illinois Department of Revenue makes a decision.

If Eastern doesn’t get the waiver and also didn’t collect the tax, the university could be in trouble, Hudson said.

“That’s part of why we chose to collect it,” he said.

The university isn’t trying to hide anything, Hudson said. It’s just trying not to make the tax a bigger deal that it really is.

Hudson said he’s only received two questions about the tax so far.

It seems most students have not noticed that their dining dollars are actually worth 6.75 percent less.

If the decision rules that products from the food court don’t have to be taxed, the tax money will not be refunded or rebated.

“If a tax is collected and it’s called a sales tax, the university has to turn it in as a sales tax,” Hudson said. The money is paid to the state, not the university.

Students and staff have been able to use dining dollars since around 2000, Hudson said.

Housing and dining was put in charge of the food court in the union in January 2002. That’s also when renovations on the union were finished, moving Subway and Chick-fil-a from the rath skeller in 7th Street Underground to the union.

Before those renovations, food was only available on a cash-only basis.

Now 80 percent of the traffic in the union is students using their dining dollars, Hudson said.

Students traditionally had to eat in dining centers offered by the university, offering tax-free food.

But now Eastern has changed the way it does business, said Mike Klemens, spokesperson for the Illinois Department of Revenue.

Instead of the university just operating a dining hall, it operates restaurants, too. Places like Chick-fil-a, Subway and Connie’s Pizza count as restaurants. These are private business entities, so their sales are taxable, Kelmens said.

Getting a sandwich from Subway in the union or from Subway on Lincoln Avenue is the same, and the two compete for business.

The only way around this tax is if the food court in the union is available exclusively to students, which isn’t the case, Klemens said.

Eastern submitted a request for a private letter ruling. According to the Illinois Department of Revenue: “Private letter rulings are issued by the department in response to specific taxpayer inquiries concerning the application of a tax statute or rule to a particular fact situation.”

Despite hopes for a positive ruling, Hudson is skeptical about the tax.

He’s guessing the university will have to continue to implement a sales tax.