Treasure Island Catering Co., Inc. v. State Board of Equalization

THE COURT. — Appeal by the defendant from a judgment in favor of the plaintiff awarding a tax refund in the sum of $10,964.96.

The sole question here presented for determination relates to the construction to be placed on section 5 (e) of the Retail Sales Tax Act (Stats. 1933, p. 2599, as amended; Deering’s Gen. Laws, 1937, Act 8493).

During the construction and operation of the Golden Gate International Exposition, the plaintiff catering corporation operated several sandwich stands, or booths, on Treasure Island. Pour booths were located within the entrances to [183]exposition buildings and several others were placed throughout the grounds at allocated places. The plaintiff sold only-frankfurter (commonly referred to as “hot dog”) and hamburger sandwiches, together with coffee, milk, ale and beer. It paid without protest the retail sales tax measured by the sales price of the beverages which it sold, but did not include therein the amount of the sales price of frankfurter and hamburger sandwiches, except those sold at one booth in the exposition grounds where customers were seated at tables provided by the plaintiff for their accommodation. The remaining sales of hamburger and frankfurter sandwiches— which are the subject of this action — were made at the other booths on the grounds, each of which was adjacent to main roadways, paths of walks, and at the four booths located in the entrance halls of the buildings. Each of those booths occupied a space about ten feet square, and neither tables nor chairs were provided for customers. The sandwiches were prepared for consumption, each wrapped in a paper napkin and handed to the purchaser over a ledge, or shelf, which formed the top of the outer walls of the booths.

After the close of the exposition, the defendant assessed an additional retail sales tax against the plaintiff, based on the sales of sandwiches at the booths and in the manner last described. Such assessment covered sales made during the period from November 21, 1937, to October 30, 1939. The plaintiff paid the additional taxes under protest and the present action was instituted to secure a refund thereof. By the terms of the judgment the plaintiff was awarded a refund of 82% per cent of the tax which it had thus paid under protest.

Prior to July 1, 1939, section 5 of the Retail Sales Tax Act provided in part as follows: “There are hereby specifically exempted from the provisions of this act and from the computation of the amount of tax levied, assessed or payable ...(e) The gross receipts from the sale of food products for human consumption. . . . ‘Food Products’ does not include . . . the furnishing, preparing or serving for a consideration of any tangible personal property consumed on the premises of the person furnishing, preparing or serving such tangible personal property.”