Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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T

550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603

Annotation 550.0270

(a) IN GENERAL—FACILITIES FOR CONSUMPTION

550.0270 Sales of Snacks Through the Honor System. A taxpayer requested an opinion regarding the application of sales tax to sales of snack food through the honor system.

It is assumed that by "honor system," the taxpayer means a system whereby customers take snacks from a box or tray and pay for the snacks by depositing money in a container the seller provides. Snack trays share common characteristics with vending machines. Both are unattended and the transaction is completed when the customer places money in a slot or other opening. However, the plain meaning of "vending machine" does not include trays or nonmechanical open boxes. Thus, the snack tray is more like a snack bar or a snack cart which can also be unattended.

Snacks sold through an honor tray may be taxable, depending on where the sales take place. Sales of snacks are taxable when sold at or near a lunch room, break room, or other facility which provides tableware or provides tables, chairs, or dishes and it is contemplated that the food sold through the snack tray will normally be consumed at such facilities. 9/22/93.