Did delivering cooked food in the same reusable pots in which it was prepared make an otherwise off-premises food sale taxable?

Plain-English summary

A seller delivered cooked food in the same pots or containers in which it had been prepared. Customers consumed the food away from the seller's premises and returned the pots for reuse.

The letter treated the food sales as exempt. Using the cooking pots to deliver the food did not turn them into the trays, glasses, dishes, or other tableware contemplated by section 6359, as long as the seller furnished no such eating items and the pots were used only for delivery.

The accompanying internal memorandum said it did not matter whether the containers were returned. Prepared food taken home by customers or delivered to their homes remained within the stated treatment.

The seller still had to maintain records that allowed the amount of off-premises sales in pots or containers to be verified.

Common questions

Did returnable pots make the food taxable?

No. The source said return of the delivery containers was immaterial.

Could the seller also provide dishes or tableware?

Not under the facts supporting this exemption. The letter expressly assumed none was furnished.

Were records required?

Yes. They had to permit verification of the claimed off-premises sales.

Citations and references

• California Revenue and Taxation Code section 6359 (as cited)
• Sales and use tax Ruling 53(B) (enclosed and 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/550-1580.pdf

Original ruling text

550.1580

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
January 28, 1955

Dear REDACTED TEXT,
Our Santa Rose Office has informed us that you have inquired concerning the application of the sales tax with respect to the sale of food in containers in which it was cooked, the containers being returned to your for reuse, but the food being actually consumed away from your premises. We understand from the report of our District Office that you proposed to submit your inquiry in writing directly to this office. We have not, however, received any communication from you and so assume that you may have understood that we would write directly to you upon the basis of the information received from our District Office. It is our opinion that the sale of cooked food for consumption away from your premises is exempt from sales tax as a sale of food products for human consumption. We do not believe that the delivery of the food in the containers or pots in which it is cooked requires the application of the tax, provided these containers or pots are used only to delivery the food to your customers who consume the food away from your premises and without any dishes or other tableware provided by you. In order to claim exemption of the sales in question it is, of course, necessary that your records be maintained in such a manner as to permit verification of the amount of your sales in pots or containers for consumption away from your premises. (See in this connection of Sales and Use Tax Ruling 53, copy enclosed, subdivision B.) Very truly yours, E. H. Stetson Tax Counsel EHS:ph

State of California

Board of Equalization

Memorandum
To:

Santa Rosa – Auditing (JPG)

From:

Headquarters – Sales Tax Counsel

Subject:

REDACTED TEXT

Date:

January 23, 1955

In further explanation of our opinion, we understand that the retailer does not furnish any “trays, glasses, dishes, or other tableware” for consumption of the food which he sells. We do not believe that the pots in which the food is cooked and delivered to the consumer constitute tableware of a kind contemplated by Section 6359. It has always been the practice to regard as exempt from the sales tax the sale of prepared food in containers which are taken home by the customer or delivered to the customer’s home by the retailer. We do not believe it is material whether or not the containers are returned to the retailer. E. H. Stetson EHS:ph