I am getting conflicting information on this. On one hand, grocery items are exempt from taxes in California. On the other hand, "supplement" value food items are charged. I operate my business from inside california. Most of my customers are in California who buy my product online. Should I have been charging sales tax to them?
You're talking about sales tax, which has absolutely nothing what-so-ever to do with income tax. You need to seek help from a business tax professional in CA or the local CA tax board.
For the most part, when it comes to taxing food, it generally works like this.
- Unprepared food that is not "ready to eat" upon purchase does not have a sales tax imposed on it. For example, if you go to the grocery store and purchase a can of string beans, that's unprepared food. So no sales tax is imposed.
But if at that same grocery store I purchase a milky way candy bar, that is considered prepared food becuase I can eat it "right now" at this very instant in time. So a sales tax is imposed on that item.
When I buy hamburger patties and buns at the grocery store, those are "unprepared" and not ready to eat. So no sales tax is imposed. However, when I go to Burger King and order a hamburger, it's "ready to eat" right away when it's presented to me. Therefore I will pay a sales tax on that purchase.