What was the taxable measure for a $25 charity food-and-wine ticket stating that $15 was a deductible donation?

Plain-English summary

A charity fundraiser sold $25 admission tickets for an event providing food and wine. Each ticket stated that $15 was tax deductible, and the taxpayer reported $10 as taxable sales and $15 as a donation.

The counsel memorandum revised an earlier conclusion that the full $25 was taxable. Based on prior treatment of similar fundraisers, it directed staff to accept the ticket's segregation at that stage, while allowing an audit to test whether the allocation and sales reporting were accurate.

Source-history note

The June 30 memorandum expressly replaces the writer's June 8 conclusion that the entire ticket price should be included in the taxable measure.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/295-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/295-0037-400.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Corneilo Gomez
Return Review

295.0037.400

Date:

June 30, 1989

916-445-5550
ATSS-485-5550
From:

David H. Levine
Tax Counsel

Subject:

I wrote you a memorandum dated June 8, 1989 in response to your mini-memo regarding the application of tax to the admission charge for a “Symphony of Food & Wine.” This was an event which involved the providing of food and wine. The admission ticket indicated a $25 charge, and in parenthesis indicated that $15 of this charge was tax deductible. I concluded that the full $25 charge should be included in the taxable measure. It has come to my attention that we have previously allowed taxpayers conducting such fundraisers to segregate amounts attributable to taxable sales from amounts not attributable to taxable sales. This taxpayer reported the $25 charge as $10 taxable and $15 not taxable, consistent with the indication on its tickets that $15 was tax deductible (the amount presumably attributable to donation). At this stage, we believe you should accept taxpayer's reporting of taxable sales based on the segregation reflected on its tickets. The audit staff may, if it wishes, audit taxpayer to ascertain if taxpayer's segregation and reporting of taxable sales is accurate.

DHL/ smt: 1447C
cc: Santa Rosa District Administrator