SALT Report 3376 – California sales tax rules can be complex when it comes to food and beverages. Hot food products sold “to go” are generally taxable, except for hot beverages and hot bakery goods. However, there are certain exceptions that apply where a seller can choose to collect sales tax on hot beverages “to go”.
The Supreme Court of California affirmed the Court of Appeals decision that Target Corporation was not at fault for charging sales tax on hot coffee sold “to go”. In the case, KIMBERLY LOEFFLER ET AL VS TARGET CORPORATION, the plaintiff attempted to litigate the issue of whether or not Target properly applied sales tax to the sale of hot coffee. The plaintiff attempted to use statues providing remedies for unlawful or unfair practice instead of seeking remedies through the State Board of Equalization (SBE). The court rejected the plaintiff’s argument and decided that a court may not directly interfere or prevent the collection of a sales tax. In support of the ruling, an Amicus Curiae Brief was filed by the SBE.
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