Was ready-to-eat chicken and salad taxable when prepared in a mobile truck, delivered to the customer's premises in disposable packaging, and supplied without utensils?

Plain-English summary

A proposed mobile food business would prepare broiled chicken, a roll with honey, and salad with dressing in a truck after receiving orders by radio telephone. It would deliver the ready-to-eat food to the customer's premises.

The chicken, roll, and honey would be wrapped in foil and boxed; the salad and dressing would be placed in individual containers. All packaging was nonreturnable, and the seller supplied no eating utensils.

The letter treated the transaction as a nontaxable sale of food products for human consumption. The delivery packaging was not the tableware or utensils contemplated by section 6359, and the food was not considered a meal served under that section.

Section 6364 also exempted the supplier's sale of the nonreturnable foil, boxes, and containers to the food business and the business's transfer of those containers with their contents.

Common questions

Did the food's being ready to eat make it a taxable served meal?

No. On the delivery and packaging facts described, the source treated it as an exempt food-product sale.

Did the seller provide utensils?

No. The absence of seller-provided eating utensils was part of the stated arrangement.

How were the foil, boxes, and containers treated?

They were nonreturnable containers sold with their contents and exempt under the cited section 6364.

Citations and references

• California Revenue and Taxation Code section 6359 (as cited)
• California Revenue and Taxation Code section 6364 (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/550-1600.pdf

Original ruling text

550.1600

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
May 17, 1954
Attention:
Gentlemen:
This is in reply to your letter of May 10 in which you describe the type of business which a client of yours proposes to enter as follows: “Broiled chicken, a roll and honey, and green salad and dressing will be delivered to customer of our client. This food will be ready for consumption upon delivery. The chicken, roll and honey will be wrapped in foil and placed in a box and the salad and dressing placed in individual containers. The foil, box and the containers will not be retained by the purchasers of the food. No eating utensils will be supplied with the food. A customer, in order to obtain the food, will telephone a central office, which in turn will advise a truck operator by radio telephone as to the name and address of the customer. The truck will be equipped with an electric broiler and refrigerator and, upon receipt of an order from the central office, a check stationed in the truck will prepare the food for delivery and consumption on the customer’s premises. Payment of the purchase price therefore will complete the transaction between the customer and the proprietor.” In our opinion this is a nontaxable sale of food products for human consumption. All of the facilities furnished by the seller in which the food is delivered are nonreturnable and do not constitute tableware or other utensils of the kind mentioned in Section 6359 of the Sales and Use Tax Law. While it might be argued that what is sold may constitute a “meal” so as to be taxable, regardless of the absence of facilities furnished by the retailer, it is our opinion that food delivered in the manner described is not properly embraced within the term “meals served” as used in Section 6359. The sale of the foil, boxes, and containers to your clients are exempt under Section 6364 as nonreturnable containers sold along with the contents, and the sale of these containers with the contents is likewise exempt under the same section. Very truly yours, E. H. Stetson Tax Counsel EHS:ph cc:

San Francisco – Tax Administrator