Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2015
Sales and Use Tax Annotations
550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603
(g) EMPLOYEES', TEACHERS' AND STUDENTS' MEALS
550.1330 Outside Entity Selling Meals to Students. A food service operator has a contract with an educational institution to operate the institute's food service facilities. The institute pays the operator a management fee. The contract also calls for the operator to turn over to the institute any amount by which the operator's gross receipts exceed its cost of business. If the gross receipts do not total its cost, the institute reimburses the operator for the shortfall in addition to the management fee.
Under the terms of the contract, the food service operator and not the institute is selling the food to the students. Accordingly, the sales are not exempt as sales to students by the institution (Sales and Use Tax Regulation 1603 (j)). 1/25/93. (Am. 2004–2).
(Note: Subdivision (j)(2) of Regulation 1603 was amended to add new subdivision (D), effective June 13, 2002, which provides that sales made by caterers of meals or food products for human consumption to students of a school are not subject to tax under certain conditions.)