Sales Tax Change for California Food Trucks, July 2014
- May 29, 2014 | Gail Cole
For the past year, the California State Board of Equalization (BOE) has been striving to educate mobile food truck vendors about California sales tax requirements. Collecting in multiple tax jurisdictions (as restaurants with wheels are wont to do) can be complicated. Therefore, to make collection a bit easier for vendors, the BOE will simplify sales tax collection for food truck vendors.
Beginning July 1, 2014, all listed prices for taxable menu items will be presumed to include sales tax unless a separate sales tax amount is also listed. Prior to July 1, the following notice must be posted when menu prices include sales tax, “All prices of taxable items include sales tax.”
Food truck vendors are advised to always keep accurate records of sales transactions; even with the new simplification measure, sales tax on food and drink remains complex. For example:
- Hot prepared foods are taxable UNLESS they are hot bakery goods, such as donuts or muffins.
- Cold foods (such as sandwiches and smoothies) are exempt UNLESS those cold foods are consumed at tables provided by the food vendor.
- Carbonated beverages (such as soda) are taxable but milkshakes and smoothies are exempt.
- Hot coffee and tea are taxable UNLESS they are purchased to-go, when they are exempt.
- All food and drink consumed at tables provided by the vendor is taxable but many to-go items are exempt.