Ezel / Tax Rulings / CA

Were meals served to service members under the reviewed military food-service contract exempt as sales to the United States?

Short answer Yes, under the reviewed contract terms. California treated the meals as sold to the United States, while warning that other food-service contracts could instead make taxable sales directly to individual service members.
State
CA
Ruling
Annotation 505.0240
Tax type
Sales and Use Tax
Issued
1963-11-27
Issued by
California State Board of Equalization
Requested by
A military food-service contractor (identity redacted)
Topics
armed forces government contracts meal sales
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1963. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1963
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is a November 27, 1963 California State Board of Equalization assistant-counsel letter published by CDTFA as support for a sales and use tax annotation. Its conclusion follows the particular invitation-to-bid and food-service contract reviewed; the letter expressly warns that other arrangements may be sales to individual service members. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

California reviewed an invitation to bid, military food-service specifications, and general food-service contract provisions for meals served to members of the armed forces.

Under those contract terms, the United States was the purchaser, so the meals were exempt from sales tax.

The letter cautioned that military setting alone did not decide the issue. Other food-service contracts could make the individual service member the purchaser, in which case the meal sale would be taxable.

What this means for you

Military food contractors, contracting officers, and tax advisers

Read the specific contract to determine who buys the meals. Do not assume every meal served on a military installation is a federal sale.

Common questions

Q: Were the reviewed contract meals exempt?

A: Yes.

Q: Why?

A: The contract made the United States the purchaser.

Q: Are all sales to service members exempt?

A: No. A contract making the individual service member the buyer would produce taxable sales.

Citations and references

  • The letter cited no numbered statute, regulation, or case.

Source

Original ruling text

1931

Military food contracts for meals served to armed-forces.

505.0240

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
November 27, 1963

Attention:
Gentlemen:
Enclosed are the “Invitation to Bid” papers you sent me for review. I have gone over the pertinent parts of the document particularly the “Military Specification Food Service Contracts” and the “General Provisions Food Services” provisions. We are still of the opinion that under the terms of the contract tax would not apply to the meals served to members of the armed forces. The opinion is based on the fact that the sale is to the United States Government. I am sure you are aware that there are some types of food service contracts that would be construed as sales to the individual service men rather than to the United States Government. Such sales of course would be subject to tax. Thank you for letting us review the papers.

Very truly yours,
Robert H. Anderson
Assistant Counsel

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