Sales And Use Tax Regulations - California Board Of Equalization (Page 2 of 5) in pdf

Regulation 1574 (Continued)

(A) PHOTOCOPIES. Tax applies to the gross receipts from sales of photocopies through coin- or card-

operated copy machines. However, library districts, municipal libraries, county libraries, or any vendor making sales

pursuant to a contract with a library district, municipal library, or county library are consumers of photocopies sold at

retail through a coin-or card-operated copy machine located at a library facility.

(B) SALES BY PARENT-TEACHER ASSOCIATIONS.

Parent-teacher associations or equivalent

associations under Regulation 1597(f) (18 CCR 1597 (f)), are consumers of tangible personal property dispensed

through vending machines and are not required to hold seller's permits by reason of such activities.

or education organizations dispensing tangible personal property for 15 cents or less through a vending machine are

the consumers of such property and are not required to hold a seller's permit by reason of such activities.

(D) SALES OF WATER. Sales of purified drinking water through vending machines where the water enters

the machine through local supply lines and is dispensed into the customer's own containers are exempt from the tax

under Revenue and Taxation Code Section 6353.

(2) FOOD PRODUCTS.

(A) Effective January 1, 1986, tax applies to the gross receipts from the retail sale of food products,

including candy and confectionery, dispensed through a vending machine at retail for more than 15 cents unless

otherwise exempted as provided below. Since sales through vending machines are presumed to be made on a tax-

included basis, total receipts from the taxable retail sale of food products through vending machines should be

adjusted to compensate for the sales tax included therein. The term "food products" does not include carbonated

beverages. A vending machine operator is a consumer of, and not a retailer of, food products, including candy and

confectionery, dispensed through a vending machine at retail for 15 cents or less, effective January 1, 1986. Tax is

measured by the sale price to the vending machine operator of such items unless otherwise exempt. If the property

sold to the operator is an exempt food product or a nonreturnable container, no tax is payable regardless of the

nature of the product when dispensed through the vending machine, and regardless of whether facilities for

consumption are furnished at locations of the vending machines. For the purposes of this subdivision, the term

"candy and confectionery" includes candy-coated gum products.

(B) Operative January 1, 1988, tax does not apply to the sales, and the vending machine operator is the

consumer, of any food products, including candy and confectionery other than beverages or hot prepared food

products, sold through a coin-operated bulk vending machine if the amount of each sale is twenty-five cents ($0.25)

or less. For purposes of this regulation, "bulk vending machine" means a vending machine containing unsorted food

products, including candy and confectionery, which, upon insertion of a coin, dispenses those products in

approximately equal portions, at random, and without selection by the customer. For the purposes of this subdivision,

the term "candy and confectionery" includes candy-coated gum products.

receipts through vending machines from the sale of cold food products, hot coffee, hot tea and hot chocolate which

are subject to the tax. The following percentages of the gross receipts from the sales of such products are subject to

the tax: 77% for the calendar year 1988, 55% for the calendar year 1989, and 33% thereafter. This partial exemption

does not apply to sales of hot prepared food products (except hot coffee, hot tea and hot chocolate) and receipts from

such sales may not be included in the computation of the exemption.

"Gross receipts from the sale of cold food products, hot coffee, hot tea and hot chocolate" represents total receipts

after adjusting for sales tax included. Therefore, in order to determine taxable receipts, an adjustment must be made

to compensate for sales tax included in total receipts. Following is an example of the computation using the 7 1/4

percent rate:

Total receipts from sales of cold food product,

hot coffee, hot tea and hot chocolate through vending machines

$10,000.00

Factor

32.2289%

Taxable receipts

$3,222.89

Tax rate

7.25%

Tax included

$233.66

Exempt receipts

$6,543.45

Sales And Use Tax Regulations - California Board Of Equalization Page 2

Related Articles

Related forms

Related Categories