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 550.1373

(g) EMPLOYEES', TEACHERS' AND STUDENTS' MEALS

550.1373 Sales of Meals by Independent Contractor. A company has entered into a contract with the college granting the company an exclusive right to operate food service facilities on the campus. According to the contract, its sole purpose is providing food and beverage services for students, faculty, staff, and guests of the college. Meals sold by the company to students are cash sales paid at the time of purchase.

It is clear from the express language of the contract that the company functions as an independent contractor. The statute clearly states that the exemption is available to public or private schools, school districts, student organizations, parent-teacher associations, and any blind person operating a restaurant or vending stand in an educational institution. The company falls into none of these categories. Rather, the company is a for profit corporation operating food service establishments as an independent contractor. The company is not entitled to the section 6363 exemption and is thus liable for sales tax on the gross receipts of its sales of meals at the food services facilities located on the college campus. 8/28/89.