Were sales of wrapped food and drinks from open-air carts at a plant taxable when buyers had to take everything to their desks or workbenches?

Plain-English summary

Two food carts operated inside a plant's entrance gate but outdoors, not inside a building. They sold wrapped sweet rolls, doughnuts, sandwiches, cookies, chips, coffee, milk, and at lunch salads, pies, and cakes, using paper service and wooden utensils where needed.

The operator provided no counters, tables, stools, benches, chairs, or automobile-parking space. Every buyer had to take the purchase to a desk or workbench to eat it.

On those facts, tax counsel concluded that the operator was not serving meals and that the cart sales were not taxable under the rule applied in 1965.

Common questions

Did the carts' location at the plant make the sales meal service?

No. The source focused on the absence of consumption facilities and the requirement that employees take food to their work areas.

Were utensils provided?

Wooden forks and spoons were available where needed, but all items were wrapped in advance and the operator supplied no eating area.

Citations and references

• The complete supporting letter cites no numbered statute, regulation, or case.

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/550-1500.pdf

Original ruling text

550.1500

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

January 18, 1965

--- --- ----- --- ----- --- --Gentlemen:
This is in reply to your letter of December 11 in which you inquire about the taxability of certain sales of food items to “X”. As we understand the situation, the sales of the food are from two carts located inside the entrance gate of the plant. The carts sell the following foods: sweet rolls, doughnuts, sandwiches, cookies, chips, coffee, and milk. During the luncheon break the carts also sell salads, pies, and cakes. All the items are on paper service with everything being wrapped in advance, and wooden forks and spoons are provided where needed. There are no counters, tables, stools, benches, or chairs provided, nor any space to park an automobile. The carts are in the open, not placed inside a building, and all purchases must be taken to the buyer’s desk or workbench to be eaten. If our general understanding of this situation is correct, you are not engaged in serving meals. Consequently, the sales from these carts are not taxable. If you have any further questions, do not hesitate to write to us again. Very truly yours,

E. H. Stetson
Tax Counsel

By Philip R. Dougherty
PRD:ls

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