For Here or To Go: California's Sales Tax for Food Products Demystified

You should always get your food "to go" in California.

I found out back in undergrad that if you order a "cold" sandwich at Subway, you didn't have to pay sales tax. The owner of said Subway posted a flyer next to the cash register stating that all cold (non-heated) sandwiches would be sold "to go" unless otherwise requested and explained that no sales tax would be assessed on those sandwiches. I figured that to mean that as long as a sandwich was not "cooked" at the store and the order was not made to be eaten on the premise, there would be no sales tax. In that sense, the effect would be the same as if you bought a sandwich from a supermarket pre-wrapped.

Of course all this was inferred on my part from that one flyer and not from any substantive source. So I looked it up to shed some light on the subject, just in case you have ever wondered why your local Starbucks or 7-Eleven asks whether you want your coffee "for here" or "to go."

The gist of it is: no sales tax is charged on hot beverages, hot bakery goods, and cold prepared foods if ordered "to go."

In general, tax is charged on the following:

1. Sales of hot prepared food products EXCEPT for coffee, hot tea, lattes, mochas, hot chocolate and hot bakery goods when sold "to go" and not as part of a combo.
   
2. Sales of meals or hot prepared food products furnished by a restaurant, concessionaire, hotel, soda fountain or similar establishment. (I'm guessing a sandwich by itself is not considered a "meal." You can equate "meal" with "combo" as it applies to fast food.)
   
3. Food sold for "dine in."
   
4. Food sold through a "drive-thru."
   
5. Food sales in any place you had to pay for admission i.e concerts, theaters, amusement parks, etc.
   
6. "To go" food sales by a deli, bakery, cafeteria, restaurant, etc. when:
   
   A) more than 80 percent of the seller’s gross receipts are from the sale of food products,
   AND
   B) more than 80 percent of the seller’s retail sales of food products are taxable as provided in 1, 2, 3, or 4 above.
   
   BUT, the seller can elect not to charge/collect the tax on the exempted items if they account for them separately and document it (via receipts and whatnot).

Sales of carbonated beverages (such as soda or sparkling water) and alcoholic beverages are always taxable.

If you really want to read the state's official stance and a more exhaustive explanation, click on the following link: http://www.boe.ca.gov/pdf/pub22.pdf