July 11, 1980
********** (the "Association"), which is exempted from federal income taxation under Internal Revenue Code Section 501(c)(3) as a charitable organization, holds three events annually at which meals are served. You inquire about the applicability of the sales tax on meals to the charges for those events.
Two of the three events, the charity ball and the installation of officers, are dinner dances. The third event, a golf tournament, provides those attending with a day of golf, two meals and an evening of entertainment. The Association arranges the events with a restaurant, caterer, or club and pays all necessary charges. The Association then sells tickets to the ball and installation and charges an entry fee to the golf tournament.
Retail sales of tangible personal property, including meals, are subject to the sales tax unless either purchased for resale in the regular course of business or specifically exempted. Sales by charitable organizations are not generally exempted; however, casual and isolated sales may be exempted from the sales tax under General Laws Chapter 64H, Section 6(c). 830 CMR 16.01 limits the application of this section in part to,
"Sales by non-profit organizations at bazaars, fairs, picnics or similar events to the extent of two such events of a day's duration held during any calendar year;---."
and also states:
"[A]n organization conducting an exempt casual sale, as heretofore defined, is deemed to be the consumer of that property which it purchases for resale and as such must pay the tax on purchases not otherwise exempt---".
Because the Association runs more than two such events each year, none of the sales of meals at these events is exempt as a casual and isolated sale.
Based on the foregoing, it is ruled that sales of meals by the restaurant, caterer or club to the Association are not taxable because the meals are purchased for resale. In order to qualify for this exemption, the Association must be registered as a vendor with the Excises Bureau and must submit a resale certificate to the restaurant, caterer or club. However, the sale of meals by the Association to its members or to the general public is subject to the sales tax on meals. In its records, the Association may allocate a reasonable portion of the ticket price to the dinner dance, which will be subject to the sales tax on meals, and the remainder to the charitable contribution, which is not so subject. Similarly, the golf tournament entry fee may be allocated into meal and non-meal portions with only the former subject to the sales tax on meals.
In order to comply with this ruling, the Association should register as a meals vendor with the Excises Bureau.
Very truly yours,
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue
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