Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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T

550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603

Annotation 550.0130

(a) IN GENERAL—FACILITIES FOR CONSUMPTION

550.0130 Meals and Beverages Included in the Price of a Cruise. An operator conducts day cruises on his boat within the California territorial waters. Customers pay a lump-sum charge which on a day cruise includes a cruise with one complimentary beverage. On a dinner cruise, the lump-sum charge includes a cruise, dinner and the customer's choice of beverage in unlimited quantity.

On a day cruise, the complimentary beverages are used incidentally in providing the day cruise service and the operator would be deemed the consumer of those beverages. On a dinner cruise, as in a day cruise, there is no tax due with respect to the portion of the charge allocable to the cruise. Tax, however, is due with respect to the charge allocable to the meal and beverage portion of the total charge. 1/24/84.