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The bacon wrapped food truck tax presumption is now law

Do you enjoy the fine delicacies of food truck cuisine? Some have unique eats that make you pull over when you see them parked; and others remind you that the food is being made in a truck.

Have you ever seen signs posted on the truck that the taxes are included in the sales price? Or, have you wondered why that fried macaroni ball may have cost .5% more when the food truck was parked in Sacramento than it did when the truck was parked in West Sacramento? Likely not, unless you are constantly thinking about taxes.

As of July 1, 2014, there is a new tax rule that applies to food trucks. Allow me to set the scene. Unlike traditional restaurants with a specific brick and mortar address, food trucks constantly move and sell food in different cities. Here’s where the fun with taxes begin. Because sales tax rates may vary from city-to-city, the food you are buying may cost more (or less) depending on where the truck you’re buying the food from is physically parked.

The food industry is a very difficult and competitive industry that requires savvy bookkeeping. Bookkeeping and taxes are even more difficult for a food truck operator because their tax rate is constantly changing based on where they park their mobile restaurant on any given day. The new food truck tax rule is a tax presumption that makes things a bit more transparent for consumers, but potentially still has the same inherent complications for food truck operators.

Prior to July 1, 2014, food truck operators were required to post signs stating that sales tax was included in the listed menu prices for any sales price to be considered tax-included. If proper signage was not posted, which was often the case, then the sales price listed did not include sales tax for taxation purposes for the food truck operator.

As of July 1, 2014, generally all food truck menu prices are now presumed to include sales tax. This change allows food truck operators to charge the same tax-included price for each menu item no matter where they park their truck, without additional signs or notices.

Supposedly, this change will eliminate the need for food truck operators to recalculate sales tax at each stop where the tax rate changes. However, an additional fix may be needed in the future as food truck operators will still need to calculate and report taxes at the proper rates of the various locations of their sales.

So the next time you bite into that bacon wrapped brownie, take a look at the menu and strike up a tax conversation with the food truck operator, I’m sure they’ll appreciate it.

This article is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

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