Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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590.0000 VENDING MACHINE OPERATORS—Regulation 1574

Annotation 590.0055

590.0055 Gum Machine Contracts. Gum and candy products are distributed through self-service gum machines through agreements with individual nonprofit civic clubs who find locations for the self-service gum and candy machines and receive commissions from sales through such machines for use in their community betterment projects. Each vending machine bears a prominent sign which indicates the name of the sponsoring civic club. These self-service vending machines are owned and operated by a "local distributor," i.e., an independent contractor.

Because of the manner in which this program is conducted and the representations made on the vending machines signs, the general public apparently considers the various sponsoring nonprofit organization to be the actual seller of the gum and candy products sold through the vending machines. Pursuant to section 6359.45, the nonprofit club's sponsors are to be considered the consumers of the gum and candy sold for 15 cents or less through a vending machine pursuant to this program. Further, the purchase of the gum and candy products which are actually sold under this program by the sponsoring civic club are not subject to tax since these items qualify as exempt food products for human consumption. 4/13/84.