Fred went to his favorite sushi restaurant the other day. For the first time, he says, the restaurant charged sales tax on his to-go order.
"Is this right?" Fred asks.
Is it right? Not if I have anything to say about it. But is it legal? Yeah, most likely.
I get asked about taxing to-go food orders pretty frequently. I'm guessing that a growing number of restaurants are adopting the practice.
As with most tax matters, the rules for this sort of thing are a little complicated. But here's what you need to know, courtesy of our friends at the state Board of Equalization.
"It does not matter whether a food product or beverage is sold a la carte or as part of a meal," the board says. "If it is sold for consumption at your place of business, it is generally subject to tax."
So there it is. If you dine at the restaurant, you'll pay a sales tax.
"When food is sold on a to-go or take-out basis," the board says, "the taxability of the sale will depend in part on whether your sales meet the requirements under the 80/80 rule."
Ah, the old 80/80 rule.
This applies if more than 80% of a business' revenue comes from selling food and more than 80% of sales is from food eaten on the premises or is served hot (even to-go).
So what about sushi?
"A cold food product sold individually and to-go is not taxable," the tax agency said. "The sale of a cold food product sold as part of a combination package may be taxable."
Sushi, therefore, is both cold and, most likely, part of a combo. That makes it taxable.
A raw deal, perhaps. But there you have it.