Generally, you need a seller’s permit to operate a vending machine in California if you are required to collect sales taxes. As a vending machine operator, you must not only supply products for the machine and collect the money, but you must also be aware of whether the products sold are subject to sales tax. Vending machines dispense various food and nonfood products, such as cigarettes, bulk items, food and water. You must post your name, address and telephone number in a prominent place at each vending machine.
According to the California Board of Equalization, any retailer selling cigarettes or tobacco products, including operators of vending machines, must obtain a license to operate and must renew it each year. You are required to obtain a separate license for each location at which you maintain a vending machine. The license is only valid for the owner and the location indicated on the application and must be relinquished when you cease to do business.
Before a permit is issued for the sale of nonbottled water dispensed through a vending machine, applicants must submit copies of test results, from a certified laboratory, for coliform, to check for bacteria, and for total dissolved solids (TDS), to check for dissolved or settled particles in the water. New applicants must submit a certificate showing that they comply with the safety regulations for each machine, along with color photographs showing the stickers and labels on the front of the machine.
According to the California State Board of Equalization, you need a permit to sell food via a vending machine if you sell the articles for more than 15 cents per item. Only one permit is required, no matter how many vending machines you have. You do not need a permit if you are a nonprofit organization selling nontaxable items, as you are then seen as being the consumer of the products. This might apply to parent-teacher associations, some youth organizations or parent cooperative nursery schools, for example.
Bulk vending machines dispense portion-controlled amounts of an item, such as loose candy or nuts. They may also dispense packaged toys, stickers or other novelties. A permit or seller’s license is not required if you sell bulk items for 25 cents or less. It is illegal to dispense items in bulk through the machine that were meant to be sold in the original package.
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