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BTLG Table of Contents > Sales and Use Tax Annotations > T > 550.0000 Taxable Sales of Food Products > Annotation 550.0826

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T

550.0000 Taxable Sales of Food Products—Regulation 1603

Annotation 550.0826

(e) Caterers

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550.0826 Employer Subsidies to Caterer. When a caterer operates a cafeteria for an employer under a contract providing that the employees will pay a designated amount for their meals and the employer will pay a subsidy, the court has ruled that the subsidy is not part of gross receipts (Szabo v. SBE). However, when the employees pay nothing for the meals and the employer pays the entire amount required by the catering contract, the payment cannot be considered a subsidy as there is nothing to which it could be attached as a subsidiary payment. The entire amount is gross receipts from the sale of meals. 10/4/83.