California does tax food, but only some of it. Groceries you take home to prepare and eat are exempt from sales tax under Revenue and Taxation Code Section 6359, while hot prepared food, meals eaten on the seller’s premises, carbonated drinks, and alcohol are taxable.1California Department of Tax and Fee Administration. Sales and Use Tax Law – Section 6359 The statewide base sales tax rate is 7.25%, and local district taxes push the total higher in most cities.2California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rate Information Whether a specific food purchase gets taxed usually comes down to three things: is it hot, where are you eating it, and how is it packaged.
Groceries Are Exempt
Nearly everything in a normal grocery cart is exempt. Fresh produce, meat, fish, eggs, dairy, bread, cereal, spices, flour, nuts, peanut butter, cooking oil, canned goods, frozen meals, baby food, and snack items all qualify as “food products for human consumption” under the exemption.3California Department of Tax and Fee Administration. Regulation 1602 – Food Products Candy, confectionery, and chewing gum are also exempt, which surprises people who move from states that tax candy.
Bottled water counts as an exempt food product as long as it isn’t carbonated. Fruit juices, vegetable juices, and other non-carbonated beverages are exempt too, and milkshakes fall under the exemption because they contain milk.3California Department of Tax and Fee Administration. Regulation 1602 – Food Products
What California Always Taxes
Hot Prepared Food
Any food sold in a heated condition is taxable, whether you eat it at the counter or take it home. Hot pizza, soup, rotisserie chicken, and heated burritos all carry sales tax. If the seller prepared the food to be sold hot, it stays taxable even if it cools on the shelf before you buy it.4California Department of Tax and Fee Administration. Sales and Use Tax Regulations – Article 8 – Regulation 1603
A separate rule catches combination meals. When a seller bundles hot and cold items at a single price, the whole sale is taxable, including the cold drink or side.1California Department of Tax and Fee Administration. Sales and Use Tax Law – Section 6359 That is why a coffee-and-pastry combo priced together will be taxed in full, while the same coffee and pastry rung up as two items may not be.
Meals Eaten on the Premises
Food served at tables, counters, or on trays and tableware provided by the seller is taxable. Restaurants, cafeterias, food-court stalls, and delis with seating all fall in this category, and even a cold salad becomes a taxable sale once it’s eaten at the seller’s table.1California Department of Tax and Fee Administration. Sales and Use Tax Law – Section 6359 Drive-in restaurants and similar spots that provide parking primarily for customers eating there are also treated as on-premises sales, even when the food goes out the window in a to-go bag.
Carbonated and Alcoholic Beverages
Sodas, sparkling water, effervescent bottled water, beer, wine, and spirits are excluded from the definition of “food products” entirely, so they are always taxable, whether you buy them at a grocery store or a bar.3California Department of Tax and Fee Administration. Regulation 1602 – Food Products A narrow exception exists for carbonated products that are 100% natural fruit juice with no additives or preservatives, which qualify as exempt food.5California Department of Tax and Fee Administration. Carbonated Fruit Juices
Cold Food To Go
Cold prepared food sold for off-premises consumption is generally exempt. A cold sandwich, a container of sushi, a tub of potato salad, or a cold pasta salad from a grocery deli is not taxable when you take it home.4California Department of Tax and Fee Administration. Sales and Use Tax Regulations – Article 8 – Regulation 1603
Hot bakery items and hot beverages like coffee or tea get special treatment: when sold individually for a separate price to go, they are treated as exempt.6California Department of Tax and Fee Administration. Sales and Use Tax Annotations – 550.0090 Buy a hot coffee by itself and you should not see sales tax on it. Buy it as part of a bundle, or from a seller that meets the 80/80 rule below, and you likely will.
The 80/80 Rule
The reason a cold sandwich taxed at a restaurant is exempt at a supermarket comes down to the seller’s sales mix. A seller meets the 80/80 rule when two things are both true: more than 80% of gross receipts come from food sales, and more than 80% of those food sales are already taxable as meals or hot food.7California Department of Tax and Fee Administration. Regulation 1603 – Taxable Sales of Food Products Most sit-down restaurants qualify.
At an 80/80 seller, cold food in a form suitable for eating on the premises is taxable even when ordered to go. That includes a pint of ice cream, a single cold sandwich, and an individual bottle of juice. A seller who meets the rule can choose to keep separate records for cold take-out food and exempt those sales, but many simply tax everything rather than manage the extra bookkeeping.7California Department of Tax and Fee Administration. Regulation 1603 – Taxable Sales of Food Products
Items that clearly would not be eaten on-site stay exempt even from an 80/80 seller. A cold party tray, a whole uncut chicken, or bulk candy sold by the pound is not in a form “suitable for consumption on the seller’s premises.”7California Department of Tax and Fee Administration. Regulation 1603 – Taxable Sales of Food Products
Vitamins and Dietary Supplements
Supplements are not food for sales tax purposes. Products sold in liquid, powder, granular, tablet, capsule, lozenge, or pill form and labeled as a food supplement, dietary supplement, or dietary adjunct are taxable.3California Department of Tax and Fee Administration. Regulation 1602 – Food Products Vitamins, protein powder, fish oil capsules, and pre-workout products all fall on the taxable side.
The label often decides the outcome. An herb capsule of kelp and dandelion root can be an exempt food product if the label does not describe it as a supplement, and the same capsule becomes taxable once “dietary supplement” appears on the package.8California Department of Tax and Fee Administration. Food Products – Regulation 1602 Annotations One carve-out: a “complete dietary food” that supplies at least 70 grams of protein, 900 calories, and minimum daily requirements for key vitamins and minerals is exempt even if it looks like a supplement.3California Department of Tax and Fee Administration. Regulation 1602 – Food Products Meal-replacement bars sold in bar form and not labeled as supplements are generally treated as bakery products and exempt.
When Buyer or Seller Changes the Answer
CalFresh (EBT) Purchases
Food bought with CalFresh benefits is exempt from sales tax, even for items that would normally be taxable. Sodas, ice, and food coloring are exempt when paid for with CalFresh benefits.9California Department of Tax and Fee Administration. Tax Guide for Grocery Stores – Industry Topics When a purchase is split between benefits and cash, the CalFresh portion is applied first to the items that would otherwise be taxable.10California Department of Tax and Fee Administration. Sales and Use Tax Law – Section 6373
School Meals
Meals and food sold to students by public or private schools, school districts, student organizations, and parent-teacher associations are exempt under R&TC Section 6363.11California Department of Tax and Fee Administration. Sales and Use Tax Annotations – 550.1180 An outside caterer selling directly to students under a contract with a student organization does not automatically pick up the exemption, because the caterer is the one making the sale.
Nonprofits
Nonprofits do not get a blanket sales tax exemption in California. A nonprofit selling food follows the same rules as any other retailer: cold grocery-type items for off-premises consumption are exempt, and hot prepared food and meals are taxable.12California Department of Tax and Fee Administration. Publication 18 – Sales Tax on Food Products
Vending Machines
Food sold through vending machines has its own framework. For items retailing at 15 cents or less, no sales tax applies to the customer.13California Legislative Information. California Revenue and Taxation Code RTC 6359.4 For everything else, the operator pays tax on only 33% of gross receipts, a simplified reporting method the Legislature set as the statewide average for taxable vending sales.14California Department of Tax and Fee Administration. Sales and Use Tax Law – Section 6359.2
Tips, Delivery, and Catering
Voluntary tips are not subject to sales tax. If you write in a tip on a check, that amount stays outside the tax calculation. Any charge the customer is required to pay, though — including the automatic 18% gratuity on large-party checks — is a mandatory service charge and is included in taxable gross receipts, even when the restaurant later hands the money to employees.15California Department of Tax and Fee Administration. Tips, Gratuities, and Service Charges – Publication 115
Delivery fees follow the food. If the delivered food is taxable, the delivery charge is taxable. If the food is exempt, so is the delivery charge, and mixed orders should be split between the two.16California Department of Tax and Fee Administration. Sales and Use Tax Annotations – 557.0107 Delivery Charges – Food Product
Catering works differently from an ordinary restaurant sale. Tax applies to the caterer’s entire charge for serving meals, including food, use of dishes and equipment, serving labor, and event planning connected to furnishing the meals.7California Department of Tax and Fee Administration. Regulation 1603 – Taxable Sales of Food Products Separately stated charges for services genuinely unrelated to food, such as entertainment, coat-check attendants, or parking valets, are not taxable.
The Rate You Pay When Food Is Taxable
The statewide base rate is 7.25%, and it applies everywhere in California.2California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rate Information Most cities and counties layer additional district taxes on top, with individual district rates running from 0.10% to 2.00%, and some areas stacking more than one. Combined rates run from 7.25% in areas with no district tax to over 10% in certain cities. You can look up the rate for a specific address on the CDTFA’s website. Exempt food products are exempt from both the state base tax and the local district taxes, so a cold sandwich taken home from a grocery deli carries no sales tax at all, no matter which city sold it.