May 12, 1980

You request a ruling on the application of the sales tax on meals to meals served in the cafeteria of ********** City Hospital, a major affiliated teaching hospital of The ********** Medical School. The cafeteria provides meals only for paid staff and for students. The students are enrolled in The ********** Medical School, City Hospital School of Nursing, LPN and aide programs conducted by trade schools, and medical and laboratory technician programs conducted by various local schools and colleges.

Massachusetts General Laws Chapter 64H, Section 6(cc) exempts from tax sales of "[m]eals prepared by employees thereof and served in any hospital... and meals furnished to students by an educational institution which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on..."

It is the position of the Department of Revenue that the exemption for "meals prepared by employees thereof and served in any hospital" applies only to meals served to hospital patients. In New England Medical Center Hospital v. State Tax Commission (Docket Nos. 86311, 86379, December 28, 1979), the Appellate Tax Board ruled that the exemption is not so restricted. However, the Department has appealed this decision, and will continue to interpret the exemption as applying only to meals served to patients unless the Supreme Judicial Court rules otherwise.

Based on the foregoing, it is ruled that sales of meals in the hospital's cafeteria are subject to tax.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH/JXD/jmcd

LR 80-23