Is Candy Subject to California Sales tax?

It’s Halloween time.

Food products are not subject to California sales tax. Food products include candy, confectionery, and chewing gum.

However, candy is sometimes subject to sales tax:

·        While chocolates filled with liqueurs meet the definition of candy and confectionery, they do not necessarily qualify for tax exemption as "food products." When these chocolates are sold with a label stating the sale to a person under age 21 is unlawful because the product contains sufficient amounts of alcohol, the products are taxable.

·        SCARY TAX: Tax applies to 33% of the sales price of food (including water and candy) sold by vending machines. The tax rate is not 33%. It means 1/3 of the product is taxable. With an average tax rate of 9%, food (including candy and water) from a vending machine thus is subject to a 3% effective tax rate 9% times 1/3). Some vending machines are smart enough to charge CA sales tax but most don’t.