Taxes on Food?

[Kirbie]

Hello!

Pardon my ignorance, but I live in state where we don't have sales tax so I'm not 100% sure of how it works.

I know the sales tax in Anaheim is 8%, and that I will be charged 8% tax on every item I buy. But what about food? I ask because I used the Starbucks app to "order" a drink from the Starbucks in Downtown Disney. Before I would have hit submit, it gave me the subtotal, and clearly said no applicable tax. The order was for one iced coffee (I was investigating to see if this location is more expensive. It is.)

Is there no tax on food? I thought there was, at least in most places? Is it because it was just a drink? What about counter service and quick service locations? When I was in WDW in December, I remember a tax being added to sit down dinners, but I honestly can't remember for counter service or quick service locations.

Was the Starbucks app just being wonky and that's what's throwing me off?

Also - for tipping, do locals tip based on the total bill, including tax, or the subtotal before tax?

Thanks for your help!!

 

[SMD]

Beverages and prepared cold items to go are exempt.

 

[longboard55]

If you buy a subway sandwich, there is no tax, unless they heat it. Funny isn't it.

 

[bcla]

Was the Starbucks app just being wonky and that's what's throwing me off?

Also - for tipping, do locals tip based on the total bill, including tax, or the subtotal before tax?

Thanks for your help!!

It's all here. This is from the California Board of Equalization, the state tax agency. Weird name; I have no idea. Prepare to be confused.

https://www.boe.ca.gov/pdf/pub61.pdf

FOOD PRODUCTS—Sales of food for human consumption are generally exempt from tax unless sold in a heated condition (except hot bakery items or hot beverages, such as coffee, sold for a separate price), served as meals, consumed at or on the seller’s facilities, ordinarily sold for consumption on or near the seller’s parking facility, or sold for consumption where there is an admission charge.​

So most food is exempted, except carbonated beverages. Hot coffee is exempt, but not when served with as a meal service.

Now I guess Disneyland or a county fair is where there's an admission charge, so in that case any food should be taxed. There's no admission charge at Downtown Disney or the Disney hotels, so that wouldn't require a tax. Regardless, you might not notice since often taxes are just included in the final price and the pretax price adjusted.

 

[Kirbie]

Prepare to be confused.

Haha, yes. For budgeting purposes, I think it will be easier if I just add the 8% to everything I'm planning on eating. That way if tax is charged, I don't go over budget; and if it's not charged Hooray, I saved a little money!

For beverages though, does that include alcoholic beverages? I'm not planning on getting much, now I'm just mostly curious since the Starbucks drink isn't taxed.

 

[bcla]

Haha, yes. For budgeting purposes, I think it will be easier if I just add the 8% to everything I'm planning on eating. That way if tax is charged, I don't go over budget; and if it's not charged Hooray, I saved a little money!

For beverages though, does that include alcoholic beverages? I'm not planning on getting much, now I'm just mostly curious since the Starbucks drink isn't taxed.

Alcoholic beverages purchased retail are charged sales tax. I found the receipt for the only alcoholic beverage from our last visit, and there was sales tax added.

Still, even the food item (lollipops) we bought had sales tax added. I think that's a matter of the admission charge triggering sales tax even on food items.

As for being outside, there are some really weird ways this is handled. We like this restaurant known for pies. If I buy a slice, it gets cut and a plastic fork is tossed in the bag. I get charged sales tax. If I buy a whole pie, they toss it in a box and tell me that they're not allowed to give me plates or utensils. No sales tax. Make much sense? Not to me.

 

[longtimedisneylurker]

Here's a weird exception to consider too. If you buy any candy, cookies, or other foods at the candy shops at the resort, it is taxed. Even though it is a food that would not ordinarily be taxed, I think it gets classified as a souvenir. If I were to buy a candy bar at the mini-mart or grocery store or whatever, I wouldn't pay sales tax on it.

 

[Kirbie]

As for being outside, there are some really weird ways this is handled. We like this restaurant known for pies. If I buy a slice, it gets cut and a plastic fork is tossed in the bag. I get charged sales tax. If I buy a whole pie, they toss it in a box and tell me that they're not allowed to give me plates or utensils. No sales tax. Make much sense? Not to me.

Super weird! I can kind of understand the whole hot/cold food. Kind of. I think it's the only way to clarify that groceries don't get taxed, but it's really confusing for things like pie haha

I'm definitely planning on buying giftcards at Target with my card, it will help save a bit on the tax. That's why I'm trying to figure out how much things will cost, so I can figure out how much to buy in gift cards. Even if there's money left over on the cards, I'm sure I could find something to use it on!

 

[bcla]

Super weird! I can kind of understand the whole hot/cold food. Kind of. I think it's the only way to clarify that groceries don't get taxed, but it's really confusing for things like pie haha

On top of that, I could buy something untaxed at Trader Joe's. They have utensils in trays near the exit.

 

[bcla]

Here's a weird exception to consider too. If you buy any candy, cookies, or other foods at the candy shops at the resort, it is taxed. Even though it is a food that would not ordinarily be taxed, I think it gets classified as a souvenir. If I were to buy a candy bar at the mini-mart or grocery store or whatever, I wouldn't pay sales tax on it.

That may fall into the exception to the exception. Since Disneyland charges admission, food items are taxed. However, Downtown Disney or the on-property hotels don't charge admission, and don't have to charge tax on candy. Movie theaters also have to charge sales tax on all foods because they charge admission. Amusement parks without admission don't charge tax on food that wouldn't be taxed at a store. They even have guidelines saying that a place that charges a fee for vehicles but doesn't for pedestrians doesn't have to charge sales tax on many foods. I think complimentary admission also won't relieve a customer from paying sales tax on food items if most customers pay. They even have a category for voluntary admission fees (not considered an admission charge).

http://www.boe.ca.gov/lawguides/business/current/btlg/vol2/suta/550-0000-all.html

I also lived through the California snack tax of 1991-2. It was a mess trying to figure out what was or wasn't a snack food item. I remember seeing lists posted at cash registers, and even then we couldn't figure out why a Snickers bar was taxed, but a sugary energy bar wasn't.

http://articles.latimes.com/1992-12-02/local/me-1336_1_snack-tax

 

[bumbershoot]

For any tax confusion an Oregonian has, everyone else gets confused while buying gas in OR and NJ.

Every state with salestax does things differently, too. I'm quite sure that WA taxes Starbucks drinks, for instance.