Tried to go to Subway #29838 at 956A W El Camino Real
Sunnyvale, today. Got my usual cold sandwich, to go, but unlike most
Subways, this one tried to charge sales tax. I left without the food.
I wonder of some restaurants simply don't understand the sales tax
regulations, or if they are collecting sales tax on non-taxable items
and pocketing the money.
Have you tried reporting this to the Board of Equalization?
Make sure that you report this to the corporate office of Subway:
Franchise World Headquarters
325 Bic Drive
Milford, CT 06461-3059 USA
Or send in your complaint via their website:
Many years ago I tried to report this, but they never responded. I don't
think they're interested. It may be that they believe that the
incorrectly collected tax is sent in to them, so it is not in their
interest to look into it. However it also is possible that the retailer
just pockets the money collected on non-taxable items.
Most stores and restaurants get it right these days, but there are some
One would think that any store using a computerized POS system ought to have
the system programmed correctly that for any item entered on the bill the
correct amount of sales tax (if any) would be calculated.
It's possible, but unlikely, unless the clientele at this particular
Subway are very different from that at other units.
You would think that. However, in the case of Subway, if they toast a
cold sandwich, then it's taxable, but if they don't it's not taxable.
Their POS system doesn't account for this. Also, if it's a cold sandwich
they need to know if you're eating the food there or taking it out. I
suspect that this particular store simply decided to collect tax on
everything, just to be safe.
Yogurtland stores always ask if it's to go since it's taxable if you eat
>On 6/28/2011 5:25 PM, Peter Lawrence wrote:
>> One would think that any store using a computerized POS system ought to
>> have the system programmed correctly that for any item entered on the
>> bill the correct amount of sales tax (if any) would be calculated.
>You would think that. However, in the case of Subway, if they toast a
>cold sandwich, then it's taxable, but if they don't it's not taxable.
Not if you're eating it there.
The Petaluma Whole Foods formerly asked whether you were eating a
cold item on site; but now they charge sales tax regardless. I did
not ask why, but am guessing it's either some sort of threshold rule,
or they were being too noncompliant.
why don't you pay the tax, then sue them. You might end up foreclosing on
their corporate office.
Or they see it as a profit opportunity.
That's why I'd inquire with the BOE.
(I don't mind paying sales tax to the state, but I do mind adding
unnecessarily to the bottom line at Whole Foods or Subway.)
The Cupertino Whole Foods used to ask, and apologize for asking, in the
same breath. You could be buying Five large containers of yogurt and
they would ask if it was to eat there. They said they had gotten into
trouble for non-compliance and were now asking everyone, even if it was
clear that the food was not going to be consumed on site.
There is just no way that Whole Foods could meet the threshold necessary
to charge tax on all cold items. If the Petaluma store is doing that
then they are doing so incorrectly.
Report them and let the IRS take care of it.
Today's mighty oak is just yesterday's nut that held its ground.
> However it also is possible that the retailer
> just pockets the money collected on non-taxable items.
Did they record it in a computerized cash register or was it voice and
cash handed over with no receipt?
Please read like a lawyer the 80/80 rule. If it applies then the
establishment must charge tax, unless it *elects* to keep special records
of its to-go cold food sales. Ergo what they did is supported by BOE
regulations. Subway likely fell under 80/80 as soon as they put the
If you want another pisser, consider if you ask for a lemonade which
shouldn't be taxed, you will pay tax because they are required to do so
because there is soda at the self serve fountain!
They obviously do not make that election due to bookkeeping and staffing
hassles. The pool of job applicants would shrink dramatically if "only
those who understand and can comply with all the nuances of California Sales
Tax Statutes and Regulations need apply".
> Please read like a lawyer the 80/80 rule. If it applies then the
> establishment must charge tax, unless it *elects* to keep special records
> of its to-go cold food sales. Ergo what they did is supported by BOE
> regulations. Subway likely fell under 80/80 as soon as they put the
> toasters in.
Only if at least 80% of the sandwiches are served toasted or served hot.
I'm pretty sure this is not the case, since nearly every other Subway
does not charge tax on cold sandwiches.
Yes, such a requirement would be "Diskimatory!"
It's been years since any cashier actually made change for me. They
usually just dump a bunch of change in my hand.
I doubt most people under 30 have even been exposed to the very idea of
Most businesses run software that interfaces with their registers, and
takes all the tax they collect and then generates reports and pays it to
the state. It would be much harder to try to figure out how much tax
they owe any other way, AND it's a crime to collect the tax but not pay
it. So when they collect tax in error, they don't profit from this,
they just pay it to the state.
Many places that sell sandwiches have mis-programmed their registers to
consider cold sandwiches (un-taxed) as hot sandwiches (taxed). I ran
into this with Subway not too long ago. Now I double check to see if
they are charging me tax before I tender payment, and if they try to
charge tax I tell them that they rang up the item wrong and make them
pick a different key to ring up the item at the right price, not taxed,
before I give my payment.
Note: Some places that sell mostly hot food (e.g. McDonalds) are
allowed to program their registers to charge and collect tax for
everything they sell, even if they sell items that would otherwise be
tax-exempt (e.g. cookies or apple slices).
>On 28/06/11 4:06 PM, SMS wrote:
>> I decided that from now on I will no longer pay sales tax on non-taxable
>> items that a take-out restaurant tries to collect sales tax on.
>> Tried to go to Subway #29838 at 956A W El Camino Real
>> Sunnyvale, today. Got my usual cold sandwich, to go, but unlike most
>> Subways, this one tried to charge sales tax. I left without the food.
>> I wonder of some restaurants simply don't understand the sales tax
>> regulations, or if they are collecting sales tax on non-taxable items
>> and pocketing the money.
>Most businesses run software that interfaces with their registers, and
>takes all the tax they collect and then generates reports and pays it to
>the state. It would be much harder to try to figure out how much tax
>they owe any other way, AND it's a crime to collect the tax but not pay
>it. So when they collect tax in error, they don't profit from this,
>they just pay it to the state.
Another thing to note is although their may be rules (like an 80-80 rule)
under which it appears a business (such as Subway) should not be
collecting unnecessary taxes, the business might easily be required
to do so anyway as the result of the outcome of an audit, where various
issues had been bargained and settled. It is not possible for the
customer to look at the situation and declare that tax is being collected
unnecessarily. It may in fact be necessary, for that business and
its audit compliance.
I suspect that if a business can solve a tax problem by agreeing to
do this, they jump on that in many cases.
Subway also serves soup which last time I checked was hot. And they are
doing breakfasts now, which are hot. Also if there is one hot ingredient
in a sandwich, e.g. bacon, the sandwich is hot. In any case it is up to
the franchise management if they want to attempt the 80/80 rule and the
bookkeeping required. As long as any tax collected is paid to California
it is legal.
You might ask corporate why this franchise is different than others you
have encountered. That might get an answer.
This puzzled me the other day. We went to Joanne's Cafe in South City
for breakfast, then decided to buy a couple of muffins for the next
day. We paid our check, then ordered the muffins, which were taxed.
Do bakeries charge sales tax, and I just never noticed it?
A restaurant is not a bakery. If 80% of what a restaurant sells is to
eat in the establishment (which is the case for most restaurants with
waiters and table service), they may be under the 80/80 rule and thus
tax everything they sell.