Legal Question in Tax Law in California

california sales tax

I am working for a child care organization and my staff used to order food items from the Costco on the phone and have them to deliver to us. Costco charged us the sales tax on the food items. Their customer representatives explained that the food items we ordered were not for re-selling so we needed to pay sales tax. However, when we bought food from Safeway or other grocery stores, we didn't need to pay sales tax but Safeway, for example, knew that we bought food for household use. Could you explain if the claim from the Costco staff is correct?


Asked on 2/13/02, 1:00 pm

1 Answer from Attorneys
Ken Koenen Koenen & Tokunaga, P.C.

Re: california sales tax

First of all, the only way that someone like Safeway or Costco to NOT charge you sales tax on taxable items is for you to have a valid resale tax number with the State Board of Equalization. The, if it is an item that requires that tax be paid by the ultimate consumer (your customer or client) you must collect that tax, and pay it to the Board.

Now, generally, food products are not taxed. See Ca. Revenue and Taxation Code Section 6359, following, which details those and shows the exceptions where they are taxed. You may be receiving items that are non-food from Costco, as well. Take this code section to them, and ask for an explanation. Here is a link to the California Code web page:

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=rtc&group=06001-07000&file=6351-6380

Read more
Answered on 2/13/02, 3:13 pm


Related Questions & Answers

More Tax and Taxation Law questions and answers in California