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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 5710

May 21, 1980

TAXATION:

Sales tax on certain food products, other than bakery products, sold by a mobile facility

The Legislature may exempt from the sales tax certain food products for immediate consumption when sold through a vending machine without extending the exemption to such sales by a mobile facility.

Bakery products, such as doughnuts, pastry, bread and cakes, are exempt from sales tax when sold for off-premises consumption either by vending machine or a mobile facility.

Honorable Jack Legel

State Representative

The Capitol

Lansing, Michigan

You have requested my opinion on the following question:

Should food sold through mobile facilities be exempt from sales tax under the provisions of 1978 PA 275?

Const 1963, art 9, Sec. 8, as amended by the people in 1974, provides, in pertinent part, as follows:

'No sales tax or use tax shall be charged or collected from and after January 1, 1975 on the sale or use of prescription drugs for humane use, or on the sale or use of food for human consumption except in the case of prepared food intended for immediate consumption as defined by law.' (Emphasis supplied.)

The Legislature implemented this constitutional provision by enactment of 1974 PA 310 to add Section 4g to 1933 PA 167; MCLA 205.54g; MSA 7.525(7), to read, in pertinent part, as follows:

'(1) A person subject to tax under this act need not include in the amount of the gross proceeds used for the computation of the tax any sales of prescription drugs for human use or food for human consumption, except prepared food intended for immediate consumption.

'(3) 'Food for human consumption' means all food and drink items intended primarily for human consumption except beverages with an alcoholic content by 1/2 of 1% or more by volume, tobacco and tobacco products, and prepared food intended for immediate consumption.

'(4) 'Prepared food intended for immediate consumption' means a retail sale of:

'(e) Food or drink intended for immediate consumption sold from a vending machine or by a vendor from a mobile facility.

In OAG, 1977-1978, No 5201, p ___ (June 9, 1977), the Attorney General considered the question whether the imposition of a sales tax on candy bars sold from a vending machine or mobile facility violated the Equal Protection Clause of the Constitution where candy bars sold in food markets and drug stores are exempt from sales tax. Relying upon Detroit Edison Co v East China Township School Dist, 247 F Supp 296, 303 (1965), aff'd 378 F2d 932, cert den, 389 US 932; 88 S Ct 296; 19 L Ed 2d 284 (1967), and Stockler v Department of Treasury, 75 Mich App 640, lv app den 402 Mich 802 (1977), the opinion concluded that the Legislature may classify food and drink sold from a vending machine or a mobile facility 'as prepared food intended for immediate consumption' without offending the Equal Protection Clauses of the Michigan and United States Constitutions.

In 1978, the Legislature enacted 1978 PA 275 to amend 1933 PA 167, Sec. 4g(4)(e), supra, to provide:

'(4) 'Prepared food intended for immediate consumption' means a retail sale of:

'(e) Food or drink intended for immediate consumption sold from a vending machine or by a vendor from a mobile facility, except for milk, juices, fresh fruit, candy, nuts, chewing gum, cookies, crackers, and chips, when sold from a vending machine selling these products.'

The underscored language was added to 1933 PA 167, Sec. 4g(4)(e), supra, by 1978 PA 275.

The clear import of this amendment is to exempt from imposition of the sales tax the sale of milk, juices, fresh fruit, candy, nuts, chewing gum, cookies, crackers and chips when sold from a vending machine. Under the authorities cited in OAG, 1977-1978, No 5201, supra, the power of the Legislature to make such a classification is clear.

As to bakery products for off-premises consumption, such as doughnuts, pastry, bread and cakes, the sales tax exemption applies whether these products are sold by means of vending machine or a mobile facility.

It is my opinion, therefore, that the Legislature may exempt certain food products for immediate consumption when sold through a vending machine without extending the exemption to sales by a mobile facility.

Frank J. Kelley

Attorney General


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