Students mill about in the Waves Café, looking for something to eat Feb. 21. Criticism of the Café and other dining locations on campus often relate to the pricing of goods. Photo by Kyle McCabe
Pepperdine Dining Services and Sodexo charge more than local stores for many items. Sodexo takes local and national prices into account when it reassesses its own pricing yearly, but the application of sales tax based on payment method at college dining locations, which differs depending on payment method, can widen the gap between on and off-campus prices.
Although Bon Appétit will replace Sodexo as Pepperdine’s meal provider this August, the current service still controls food pricing all across the Malibu campus. Sodexo often charges more for items than local grocery stores, and the method of payment at dining locations affects the total charge.
“I think the proportions of the food, the boxes or whatever, can be bigger,” first-year Ethan Swonger said. “Sometimes it’s small, like, you’re paying like $10 or whatever. And it’s like, ‘OK, that wasn’t too much.’”
Several factors contribute to on-campus food pricing, including a California state law regulating sales taxes, Rodney Reed, the Sodexo resident district manager at Pepperdine, wrote in a Feb. 18 email to the Graphic.
Reed wrote that the displayed “total” on campus cash registers includes sales tax, but Pepperdine dining locations only charge sales tax on items purchased with debit, credit and cash, not meal points.
First-year Ana Paula Ruiz said she assumed she paid whatever price the registers at the Caf list as the total, but because she pays with meal points, she actually pays less.
For example, a vitaminwater at any campus dining location costs $3.19 when the purchase comes from a student ID, but a credit or debit card purchase totals $3.49.
Section 6363 of the California Revenue and Taxation Code provides a sales tax exemption for food sold to students. Greg Weston, senior manager at the tax law specialist group Miles Consulting, included a letter from the California Board of Equalization explaining the application of section 6363 on school meals sold by outside entities in a Feb. 11 email to the Graphic.
“The sales of the meals will be considered nontaxable if the meals are first sold to the schools or PTAs [parent teacher associations] before they are sold to the students,” the Board of Equalization wrote. “If the outside entity sells the food products directly to the students, such sales are not sales by the school and do not fall within the above exemption.”
Reed reiterated the distinction between food sold to the school and food sold directly to students. Sales tax does not apply when students buy meal plans or add funds to their Waves Cash Global accounts, but does apply to debit and credit purchases, Reed wrote.
Reed cited a different law, Annotation 550.1370 of California Code Regulation 1603, but the application of sales tax remains the same.
“Per the California Tax Code for the Sales of Meals and Food Products at Schools and Colleges, purchases made with meal plans are not taxable as those meal plans are purchased directly from the University,” Reed wrote. “As such, we are required to charge taxes on all cash and credit card sales.”
The kind of food purchased on campus does not affect sales tax like it does in elsewhere in California. The California Tax Guide for Grocery Stores provides an overview of taxable and nontaxable items. Following the vitaminwater example, the guide lists both “Nutritional drinks” and “Non-carbonated sports drinks” as nontaxable.
The guide lists other common nontaxable items, like energy bars, granola bars, food products, kombucha and water. The state does tax some common grocery store food items, though, such as carbonated water and soda.
The prices of items at Pepperdine dining locations, even before sales tax, often exceed the prices at local grocery stores.
Students, including Ruiz, said they noticed the difference in prices.
“Croissants,” Ruiz said. “They’re much cheaper in Ralphs than they are here.”
Sodexo reviews its prices on an annual basis, Reed wrote it considers the cost of goods from the distributor as well as prices at national and local restaurants and stores when setting prices.
“After data is collected and reviewed, Sodexo partners with University leadership to finalize any adjustments needed,” Reed wrote. “Typically, any adjustments mirror current inflationary trends.”
Sodexo provides services similar to restaurants, markets and grocery stores on campus, and Reed wrote that Sodexo’s pricing balances all those roles. He added Sodexo has not increased prices this academic year.
Pricing does not vary between dining locations on campus, and Reed said Dining Services even performs audits to make sure prices stay consistent.
Sodexo only operates the “fresh food vending machines” that open like refrigerators. Since another vendor handles the Coca-Cola drink machines and other snack machines on-campus, prices do vary. The Coca-Cola vending machines on campus do not charge sales tax, and they sell vitaminwater for $2.
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