July 8, 1980

You request a ruling on whether the sales of food and beverages by the clients of ********** Inc. in its coffee shop, are subject to the sales tax on meals.

********** (the "Organization"), which is funded by the Commonwealth of Massachusetts and located on the grounds of the ********** State Hospital, provides evaluation, training and placement for the mentally and emotionally handicapped. As part of this training, your clients prepare and serve meals and run the cash register in the Organization's coffee shop. Although it is open to the public, nearly all of the patrons of the coffee shop are either staff and clients of the Organization or employees of the ********** State Hospital who work in the same building.

The sale of food and beverages by a coffee shop is subject to the sales tax on meals unless specifically exempted. General Laws Chapter 64H, Section 6(cc) provides, in part, an exemption for those:

"[m]eals provided 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..."

The clients of the Organization are not employees of the hospital and the Organization is not an educational institution within the statutory definition and therefore the exemptions in Section 6(cc) are inapplicable.

Based on the foregoing, it is ruled that sales of food and beverages in the coffee shop of ********** Inc. are subject to the sales tax on meals.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH/DMH/jmcd

LR 80-46