California Sales Tax Exemptions for NonProfits - Food Sales
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5/6/20263 min read
Food To Go
The information below does not apply to your organization’s sales of food in places where admission is charged or where “dining facilities” are provided for your customers.
Dining facilities include tables, chairs, benches, counters, plates and glasses, etc.
Food To Go – Cold Food Products
Sales of “cold food products” such as produce, candy, cold sandwiches, baked goods, ice cream, and snack foods are generally not taxable.
However, certain vending machine sales of candy and other food products are partially taxable.
Food To Go – Cold Beverages
Sales of carbonated beverages—including carbonated bottled water—are also taxable.
“To go” sales of noncarbonated and noneffervescent bottled water and juice are not taxable.
Special rules for hot beverages are discussed under Hot prepared foods.
Food To Go – Hot Prepared Food
Sales of “hot prepared food products” are taxable.
This includes food products, items, components, or beverages heated for sale and sold at any temperature higher than the air temperature of their sales location.
Examples include hot pizza, hot nuts, hot barbecued chicken, hot sandwiches, and hot soup.
Sales of food prepared to be served hot are taxable even if the food has cooled by the time it is served.
Hot bakery goods, hot coffee, and other hot beverages are considered hot prepared food products.
However, the sale of individual hot bakery items or drinks “to go” for a separate price is tax-exempt unless the items are sold through a vending machine for more than 15 cents or as part of a combination package.
Food To Go – Combination Packages
Combination packages are two or more items sold together for one price.
The application of tax will vary depending on the type of combination package sold:
A. A hot prepared food item or hot drink and any other food item - Full price is taxable. (Example: Hot coffee and pastry sold together for $3.5. The full $3.5 price is taxable.)
B. All cold food - Not taxable. (Example: Cold sandwich sold with a cookie and chips for $5.75. The sale is not taxable.)
C. Carbonated drink and at least one cold food item - The portion of the selling price that represents the charge for carbonated drink is taxable. (Example: Cold sandwich package in B. sold with a carbonated soft drink for $6, with the soft drink normally priced at $1. Tax applies to $1.)
Food for Consumption On-site
Sales of food for consumption at certain events and locations are generally taxable, even if the sale of the same food product would be tax-exempt when sold “to go.”
The following information explains how tax applies to the sale of food intended to be eaten on-site, but it is not a guide to restaurant sales.
Food for Consumption On-site – Admission Charged
Sales of food, meals, or beverages are generally taxable when the food product is sold ready to eat within a place where admission is charged, such as a play, a football game, or a similar location.
Example: If you sell juice and sandwiches at a dog show where spectators have paid $5 for admission, your food sales are taxable.
Certain locations are not covered by this general rule:
- National and state parks, marinas, campgrounds, and recreational vehicle parks.
- Places where admission is based on membership dues or use of a student body card, and places where spectators are admitted free—such as bowling alleys and golf courses—are not considered to be places where admission is charged.
- Meals served by religious organizations at a social event or other gathering when the purpose of serving or furnishing the meals is to obtain revenue for the functions of the organization and the proceeds are actually used in carrying out such functions. A clear separation of charges must be made on the ticket if the admission covers a taxable event.
Food for Consumption On-site – Dining Facilities
Sales of food, meals, or beverages are generally taxable when sold ready to eat at a location where your organization provides any of the following:
- Tables, chairs, or counters for dining.
- Trays, glasses, dishes, or other tableware for your customers’ use.
Example: Your organization sells ice cream sundaes at a free community fair where tables and chairs are available for use by your customers. Your sales are taxable.
However, if you sell food products that would not ordinarily be eaten on-site— such as jars of jam, whole pies, or packages of cookie dough—those sales are not taxable.
If you make sales of this type, be sure to keep good records that clearly indicate the type of products you sold.
Source: California Department of Tax & Fee Administration (CDTFA)