Did public-park benches a quarter mile from a concession stand count as eating facilities provided for the concessionaire's customers?

Plain-English summary

A food concession operated in a public park. After reviewing added facts, the Board learned that the nearest park benches were about one-quarter mile from the stand, the concession contract did not address them, the public used them generally, and the seller had no duty to clean, maintain, or police them.

The memorandum said facilities create the relevant meal-service element only when there is a rational connection between the seller and facilities provided for eating its food. Relevant facts could include proximity, whether the tables were in the same room, how much they were used for non-meal purposes, and whether the retailer kept them clean.

There was no such connection here. The distant general-use benches belonged to another party and were not maintained by the concessionaire. Customers' occasional use of them did not make the concessionaire a caterer or turn the benches into facilities it provided for meal consumption.

Common questions

Did any customer use of public benches make the concession a caterer?

No. Mere use was insufficient without a rational connection between the seller and the facilities.

What facts supported the result?

The quarter-mile distance, general public availability, silence in the park contract, and the seller's lack of maintenance responsibility.

Could closer or seller-maintained tables change the analysis?

Yes. The source identified proximity, shared location, actual use, and seller maintenance as relevant indicators.

Citations and references

• California Revenue and Taxation Code section 6359(c)(2) (as printed in the source)
• California Sales and Use Tax Regulation 1603 (as cited)
• California Sales and Use Tax Annotation 550.0620 (as cited)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/550-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/550-0182.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Ms. Joan M. Albu
Supervisor, Operations Section

From:

John Waid
Tax Counsel

Subject:

T--- Concessions
SY -- XX-XXXXXX

550.0182

March 22, 1991

Assistant Chief Counsel Gary J. Jugum has referred your memorandum of March 6, 1991, to me for a response. You are of the opinion that the above taxpayer should not be treated as a caterer, which conclusion of the Legal Division was expressed in my memorandum to Mr. A. L. Giorgi, Return Review, dated January 29, 1991. You indicate that Return Review, at your direction, has obtained additional facts from the taxpayer as follows: “The taxpayer states that the park benches are about ¼ mile away from the concession stand and that the contract with the park department is silent regarding the benches.” OPINION We believe it is clear from Revenue and Taxation Code Section 6359(c)(2) that in order for meals to be excepted from the food product exemption some service element is required. This means there must be at least some rational connection between the facilities furnished for the meals’ consumption and the person selling meals. If the tables and chairs (or other facilities) are some distance from the concessionaire, are owned by persons other than the concessionaire, and are provided for other uses, the fact that retailers’ customers use the facilities is not sufficient to constitute “service”. What this “boils down to” is that it must be shown with some certainty that the tables and chairs are provided for the purpose of the consumption of the meals. This may be shown by the proximity of the tables to the concessionaire, the fact that the tables and chairs are in the same room as the concessionaire, percentage of persons using the tables and chairs for purposes other

Ms. Joan M. Albu

-2-

March 22, 1991
550.0182

than eating meals, and the fact that the retailer services the tables by keeping them clean of refuse and the like. We agree with your conclusion that T--- Concessions should not be treated as a caterer under these additional facts. The facts as originally stated by Return Review indicated that the park district provided tables for food consumption readily accessible to the taxpayer’s customers. T--- Concessions’ position thus appeared to be similar to that of a food retailer in a food mall where seating was provided for the general benefit of patrons of all the retailers therein. It now appears that there is no rational connection between the facilities which the park district has furnished and T--- Concessions. The tables are some distance from T--- Concessions’ stand and appear to be available for general use. T--- Concessions appears to have no responsibility to maintain or police the facilities. The mere fact the taxpayer’s customers use the tables is insufficient to provide the element of “service” required by Regulation 1603. This result finds a close parallel to that contained in Annotation 550.0620, “Parking Facilities” [“Drive-Ins”]. We stated therein that the fact that supermarkets and shopping centers provided parking facilities for general use was not sufficient to classify coffee and snack bars located therein to be classified as “drive-ins”.

JLW:es
3790I

cc:

550.0182.doc

Mr. Gary J. Jugum
Mr. O. A. McCarty, Supervisor, Return Review