Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603
(a) IN GENERAL—FACILITIES FOR CONSUMPTION
550.0180 Paper Cups in Plastic Holders, Crockery Mugs, and Counters, as Facilities.
(1) The tax applies with respect to sales of fruit juices which are served in paper cups contained, however, in plastic holders.
(2) The tax applies to receipts from sales of coffee or tea in crockery mugs.
(3) The tax applies to sales of sandwiches, doughnuts, or other food products for the consumption of which the customer uses the counter or any other facilities furnished by the seller.
In Treasure Island Catering Company v. State Board of Equalization, 19 Cal.2d 181, the sales held exempt were those where the food was wrapped in a paper napkin and handed to the purchaser over a ledge or shelf. The sale of frankfurter and hamburger sandwiches were the only sales involved, tax having been paid in connection with the sale of the beverages. It was also held that the ledge did not constitute a "counter," under the meaning of section 6359, since the ledges were not intended to be used as counters due to the fact that a continued or general utilization of the ledges for such purposes would have interfered with the accessibility to plaintiff's foods by prospective customers.
The tax does not apply with respect to sales of sandwiches or doughnuts which are handed to customers and taken away for consumption or consumed without the use of the seller's "counter," no tableware or other facilities being furnished. 2/13/51.