Past L.P. gubernatorial candidate and San Diego anti- tax gadfly, Richard Rider, clarified something for me the other day: It can be cheaper buying take- out food than eating or drinking it where you bought it since sales tax is applied to food eaten in- store but not to take- out.Funny. I had it in my mind it was the other way around. In fact, his e-mail was rather timely as I was curious buying an iced tea at Eureka's Fresh Freeze yesterday. The menu said a large iced tea was $2.25 or thereabouts and I paid more than that when all was said and done. I figured it must be sales tax, having assumed take- out is taxed.The gal at Fresh Freeze never asked if the iced tea was for take- out, but they always do when I buy food there.Here's a link Rider provided and here's Rider's piece on it:
The sales tax rules on food and drink purchased in fast food joints is tricky indeed, and varies from state to state. I bet a goodly number of these eateries do it wrong.
Here's some advice -- whether or not you want to eat in the building, ALWAYS say it is "to go." Skip the food tray, and maybe skip the sales tax. Or maybe not. No fast food outlet will care whether you change your mind and actually DO stay inside to eat -- they are just following the government's sales tax procedures.
Of course, it is more complicated than that. Coffee at a Starbucks almost surely can avoid the sales tax if it is "to go." But at Subway, it is best to order your COLD subway sandwich and drink separately from your hot food, as they will likely charge a sales tax on the full amount, even though only part of the order is hot food (such as their wonderful meatball sandwich).
For restaurants where 80% of the food is consumed on the grounds, they likely will always charge sales tax on everything -- following the law.
It's a rather complicated law. There is a 30 page oddly readable tome available online from the CA Board of Equalization. It is "must reading" for any restaurant owner.
So remember my skinflint motto -- when in doubt, "take it out."