AB 155, as introduced, Dababneh. Sales tax: exemption: food products: vending machines.
Existing sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. That law provides various exemptions from that tax, including an exemption for food products, as specified. Existing law excludes food products from this exemption when certain conditions are met, including when the food products are sold through a vending machine. Existing law, however, provides a partial exemption from that tax for certain food products actually sold through a vending machine.
This bill would, on and after January 1, 2016, exempt from that tax the gross receipts of any retailer from the sale at retail of food products actually sold through a vending machine, and would make other conforming changes.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which conforms to the Sales and Use Tax Law. Amendments to state sales and use taxes are incorporated into these laws.
The amendments made by this bill would be incorporated into these laws.
Section 2230 of the Revenue and Taxation Code provides that the state will reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 6359 of the Revenue and Taxation Code
2 is amended to read:
(a) There are exempted from the taxes imposed by this
4part the gross receipts from the sale of, and the storage, use, or
5other consumption in this state of, food products for human
6consumption.
7(b) For the purposes of this section, “food products” include all
8of the following:
9(1) Cereals and cereal products, oleomargarine, meat and meat
10products, fish and fish products, eggs and egg products, vegetables
11and vegetable products, fruit and fruit products, spices and salt,
12sugar and sugar products, candy, gum, confectionery, coffee and
13coffee substitutes, tea, and cocoa and cocoa products.
14(2) Milk and
milk products, milkshakes, malted milks, and any
15other similar type beverages that are composed at least in part of
16milk or a milk product and that require the use of milk or a milk
17product in their preparation.
18(3) All fruit juices, vegetable juices, and other beverages,
19whether liquid or frozen, including bottled water, but excluding
20spirituous, malt, or vinous liquors or carbonated beverages.
P3 1(c) For purposes of this section, “food products” do not include
2medicines and preparations in liquid, powdered, granular, tablet,
3capsule, lozenge, and pill form sold as dietary supplements or
4adjuncts.
5(d) None of the exemptions in this section apply to any of the
6following:
7(1) When the food products are served as meals on or off the
8premises of the
retailer.
9(2) When the food products are furnished, prepared, or served
10for consumption at tables, chairs, or counters or from trays, glasses,
11dishes, or other tableware whether provided by the retailer or by
12a person with whom the retailer contracts to furnish, prepare, or
13serve food products to others.
14(3) When the food products are ordinarily sold for immediate
15consumption on or near a location at which parking facilities are
16provided primarily for the use of patrons in consuming the products
17purchased at the location, even though those products are sold on
18a “take out” or “to go” order and are actually packaged or wrapped
19and taken from the premises of the retailer.
20(4) When the food products are sold for consumption within a
21place, the entrance to which is subject to an admission charge,
22except for national and
state parks and monuments, marinas,
23campgrounds, and recreational vehicle parks.
24(5) When the food products are sold through a vending machine.
end delete25(6)
end delete
26begin insert(5)end insert When the food products sold are furnished in a form suitable
27for consumption on the seller’s premises, and both of the following
28apply:
29(A) Over 80 percent of the seller’s gross receipts are from the
30sale of food products.
31(B) Over 80 percent of the seller’s retail sales of
food products
32are sales subject to tax pursuant to paragraph (1), (2), (3), orbegin delete (7)end delete
33begin insert (6)end insert.
34(7)
end delete
35begin insert(6)end insert When the food products are sold as hot prepared food
36products.
37(e) “Hot prepared food products,” for the purposes of paragraph
38begin delete (7)end deletebegin insert (6)end insert of
subdivision (d), include a combination of hot and cold
39food items or components where a single price has been established
40for the combination and the food products are sold in combination,
P4 1such as a hot meal, a hot specialty dish or serving, a hot sandwich,
2or a hot pizza, including any cold components or side items.
3Paragraphbegin delete (7)end deletebegin insert (6)end insert of subdivision (d) does not apply to a sale for a
4separate price of bakery goods or beverages (other than bouillon,
5consommé, or soup), or where the food product is purchased cold
6or frozen; “hot prepared food products” means those products,
7items, or components that have been prepared for sale in a heated
8condition and that are sold at any temperature that is higher than
9the air temperature of the room or place where they are sold.
10(f) Notwithstanding paragraphbegin delete (6)end deletebegin insert (5)end insert of subdivision (d), if the
11seller elects to separately account for sales of food products
12specified in subdivision (b), then the gross receipts from the sale
13of those food products shall be exempt under subdivision (a),
14provided that the separate accounting is fully documented in the
15seller’s records. However, if the seller’s records do not reflect the
16separate accounting of the gross receipts from sales of nontaxable
17food products, the seller’s election under this subdivision shall be
18revoked.
Section 6359.2 of the Revenue and Taxation Code is
20repealed.
(a) Except as otherwise provided in Sections 6359.4,
226359.45, 6363, and 6370, for the year beginning on January 1,
231988, and ending on December 31, 1988, 77 percent of the gross
24receipts of any retailer from the sale at retail of food products shall
25be subject to the tax imposed by Section 6051, when those food
26products are actually sold through a vending machine.
27(b) Except as otherwise provided in Sections 6359.4, 6359.45,
286363, and 6370, for the year beginning on January 1, 1989, and
29ending on December 31, 1989, 55 percent of the gross receipts of
30any retailer from the sale at retail of food products shall be subject
31to the tax imposed by Section 6051, when those food products are
32actually sold through a vending machine.
33(c) Except as otherwise provided in Sections 6359.4, 6359.45,
346363, and 6370, for the year beginning on January 1, 1990, and
35thereafter, 33 percent of the gross receipts of any retailer from the
36sale at retail of food products shall be subject to the tax imposed
37by Section 6051, when those food products are actually sold
38through a vending machine.
39(d) (1) The Legislature finds that 33 percent represents the
40statewide average of food products sold through vending machines
P5 1which are subject to the tax imposed under this part. Therefore,
2the Legislature establishes this average as the measure of the tax
3with respect to vending machine sales to simplify tax auditing
4procedures and to provide for uniformity in the taxation of gross
5receipts derived from the sale of food products through vending
6machines.
7(2) The Legislature also finds that due to fiscal constraints, it
8is necessary to phase in the partial exemption for sales made
9through vending machines in the 1988 and 1989 calendar years.
10(e) For purposes of this section, “food products” includes hot
11coffee, hot tea, and hot chocolate, when those hot beverages are
12actually sold through a vending machine for a separate price. “Food
13products” does not include other hot prepared food products, as
14defined in Section 6359.
Section 6359.2 is added to the Revenue and Taxation
16Code, to read:
(a) On and after January 1, 2016, there are exempted
18from the taxes imposed by this part, the gross receipts of any
19retailer from the sale at retail of food products actually sold through
20a vending machine.
21(b) For purposes of this section, “food products” means food
22products as defined in Section 6359, and includes hot coffee, hot
23tea, and hot chocolate, when those hot beverages are actually sold
24through a vending machine for a separate price. “Food products”
25does not include other hot prepared food products, as defined in
26Section 6359.
Section 6359.4 of the Revenue and Taxation Code is
28repealed.
(a) Any vending machine operator is a consumer of,
30and shall not be considered a retailer of, food products which sell
31at retail for fifteen cents ($0.15) or less and which are actually sold
32through a vending machine.
33(b) Notwithstanding subdivision (a), any vending machine
34operator is a consumer of, and shall not be considered a retailer
35of, food products, other than beverages or hot prepared food
36products, which are sold through a coin-operated bulk vending
37machine if the amount of each sale is twenty-five cents ($0.25) or
38less. For purposes of this subdivision, “bulk vending machine”
39means a vending machine containing unsorted food products, other
40than beverages or hot prepared food products which, upon insertion
P6 1of a coin, dispenses those food products, including candy and
2confectionery, in approximately equal portions, at random, and
3without selection by the customer.
Section 6359.45 of the Revenue and Taxation Code
5 is amended to read:
(a) Any vending machine operator which is a
7nonprofit, charitable, or educational organization is a consumer
8of, and shall not be considered a retailer of, tangible personal
9property which sells at retail for fifteen cents ($0.15) or less and
10which is actually sold through a vending machine.
11(b) Any library district, municipal library, or county library and
12any vendor making sales pursuant to a contract with a library
13district, municipal library, or county library is a consumer of, and
14shall not be considered a retailer of, photocopies which it sells at
15retail and which are actually sold through a coin-operated copy
16machine located at a library facility.
17(c) This section shall not apply to any vending machine operator
18which is a nonprofit, charitable, or educational organization that
19is a retailer of tangible personal property that is a food product
20as defined in subdivision (b) of Section 6359.4, and which is
21actually sold through a vending machine.
Notwithstanding Section 2230 of the Revenue and
23Taxation Code, no appropriation is made by this act and the state
24shall not reimburse any local agency for any sales and use tax
25revenues lost by it under this act.
This act provides for a tax levy within the meaning of
27Article IV of the Constitution and shall go into immediate effect.
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