State: Food Trucks Can Include Sales Tax To Menu Price

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SACRAMENTO-

The State Board of Equalization hopes to feed state coffers by changing the tax collection rules on food trucks. Beginning July 1, food trucks will be able to include the sales tax on the menu price without posting a sign saying that sales tax is included.

Food truck menus typically post prices in whole dollars, not including the sales tax. Operators would rather collect money in whole dollars and not handle the change, especially when lines at popular trucks get long.

But  change is given after the sales tax is added, which uses up time and is an accounting nightmare.

“We’re making exact change on odd numbers like $7.63, then we have to give them the change on that.  It slows down our lines quite a bit, ” Drewski’s Hot Rod Kitchen owner Andrew Blaskovich said.

Blaskovich says he typically has 50 people in line waiting for food at some food truck events and since margins are tight, the can’t afford to have customers leave the line in frustration.

The new rule means food truck operators can collect whole dollars and give whole dollars in change and then calculate the sales tax owed to the state later.

“Anything we could do to shave a couple of minutes here or shave a dollar there, it makes a huge difference,” Blaskovich said.

The Board of Equalization addressed the issue because there are 4,000 registered food trucks in California and the number is growing. Board of Equalization member George Runner says they want to help small businesses succeed.

“When they have a successful business California taxpayer’s win too,” Runner said at a media event Friday.

Customers like it too.  Food truck customer Lynn Twilley, like her co-workers who frequent food trucks, only have a half hour for lunch.

“Who want’s change back, just give me an even number and her you go,” Twilley said.

While credit and debit cards are accepted by many food trucks, cash is still king.  Some operators say 70 percent of customers typically pay in cash.

The small window of time that many food trucks operate in requires them to work as quickly as possible if they are to survive.

“With tax being included,  it’s even dollar amounts, we could probably hit another 20 to 30 percent of the people in the short amount of time,” said Blaskovich.

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