Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603

Annotation 550.1042

(f) SOCIAL CLUBS, FRATERNAL AND RELIGIOUS ORGANIZATIONS

550.1042 Religious Organizations. A religious organization sells coffee, sodas, "Snapple," muffins, bagels, and other snacks in conjunction with its services which are primarily held on Sundays and Tuesdays. Tables and chairs are provided in the foyer of the facility to provide ministry attendees an opportunity to sit and eat. This seating arrangement is designed to allow ministry attendees to build friendship and experience fellowship within the church. The proceeds from these sales are used to cover the cost of the food and beverages with any excess placed in the ministry's general fund.

The property of the organization is exempt pursuant to Subdivision (f) of section 3 of Article XIII of California's State Constitution. Thus, its sales of meals and food products at these social gatherings are exempt from sales tax under section 6363.5 provided the purpose of the sales is to raise revenues which are used for carrying on the functions of the organization.

However, carbonated beverages and carbonated or effervescent bottled waters do not qualify as food products. Thus, sales of these items are subject to sales tax. Sales of "Snapple" products which are flavored ice teas or noncarbonated flavored waters are not taxable. 8/21/95.