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Why is There Sales Tax On Your Lunch?

Have you wondered why some places charge sales tax on food and others don’t?

The reason isn’t because the owner is nice or you’re friendly with the cashier. California has complex rules on sales tax on food items.

However, in a nutshell it falls into 2 main issues:

(a) Is your food hot or cold?

(b) Where did you buy your food?

HOT FOOD

California imposes sales tax on hot food.

COLD FOOD

California may or may not charge sales tax on cold food.

Generally taxable if (a) you eat inside a dining establishment or (b) taxable on to go orders if more than 80% of the business’ sales are subject to sales tax.

For a consultation on sales tax issues for your business, contact me today.

Richard Pon CPA, CFP