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misswong
Returning Member

Sales Tax - Ice cream

I have a client who owns an ice cream business in CA and is wanting to know if they qualify to not charge/collect sales tax. I found this (pasted below) but can't figure out if they qualify or not. They only do to-go or delivery services (like doordash which will also pick up to-go). Any insight is much appreciated! 

(c) Cold Food Sold on a "Take-Out" Order.

(1) General.

(A) Seller Meeting Criteria of 80-80 Rule. When a seller meets both criteria of the 80-80 rule as explained in subdivision (c)(3) below, tax applies to sales of cold food products (including sales for a separate price of hot bakery goods and hot beverages such as coffee) in a form suitable for consumption on the seller's premises even though such food products are sold on a "take-out" or "to go" order. Sales of cold food products which are suitable for consumption on the seller's premises are subject to the tax no matter how great the quantity purchased, e.g., 40 one-half pint containers of milk. Except as provided elsewhere in this regulation, tax does not apply to sales of food products which are furnished in a form not suitable for consumption on the seller's premises.

1. More than 80 percent of the seller's gross receipts are from the sale of food products, and

2. More than 80 percent of the seller's retail sales of food products are taxable as provided in subdivisions (a), (b), (e), and (f) of this regulation.

2 Replies
xmasbaby0
Level 15

Sales Tax - Ice cream

Sorry---we do not answer questions about state sales tax in this forum.   We are here to help with income tax questions.   Your client needs to find out from the state what the rules are regarding this issue.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Rick19744
Level 11

Sales Tax - Ice cream

I agree with @xmasbaby0 in that this forum is designed to provide assistance in the income tax area.

Having said that, see the attached for some guidance; which you may already have as it appears you have done some preliminary research.

After reviewing this, I would recommend you call CA for additional guidance.  There are phone numbers provided at the end of the publication.

https://www.cdtfa.ca.gov/formspubs/pub61.pdf

 

*A reminder that posts in a forum such as this do not constitute tax advice.*
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