How much of a wine shop's combined charge for an educational seminar and wine tasting was subject to California sales tax?

Plain-English summary

A retail wine and beer shop planned paid evening seminars combining a 45-minute educational lecture with comparative tastings of eight to twelve wines. The wine would come from store inventory, with one- to two-ounce portions served to each student, and its stated value would equal roughly 25% to 40% of the seminar charge.

Assuming the wine had been purchased ex-tax under a resale certificate, staff counsel concluded that the shop should report and pay tax on a prorated percentage of the total seminar price. The letter did not determine the exact percentage; it directed the shop to consult the district office about the measure to report.

Citations and references

• The official letter cites no statute, regulation, case, or prior ruling by number.
• August 24, 1979 letter to the Board's West Los Angeles office asking about tax on proposed educational wine tastings and seminars, and its referral to legal staff — request not separately reproduced beyond the response's summary; referral date, official, form, and copy not supplied
• Proposed fall seminar series with a 45-minute lecture, eight to twelve wines, one- to two-ounce servings, $10–$25 student fee, and wine valued at 25–40 percent of the total price — program materials, inventory and cost records, resale certificate, registrations, receipts, servings, and allocation records not reproduced in the official PDF
• Direction to obtain the exact measure from Art Brown at the West Los Angeles office — no consultation, correspondence, computation, district determination, return, or later outcome supplied
• Official Annotation 295.0755's retailer, educational seminars, lecture and tasting sequence, wine bought under resale certificates, percentage-of-price measure, and Dec. 6, 1979 date — annotation omits the request and referral provenance, proposed posture, durations, wine count and serving size, $10–$25 fee and 25–40 percent value estimate, ex-tax assumption, unresolved exact measure and district referral, missing records, absence of numbered authority, reliance status, and later outcome and supplies no additional transaction record

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/295-0755.pdf

Original ruling text

295.0755

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
916/ 445-3237

December 6, 1979

Mr. G--- G--The W--- H--XXXX --- Avenue
--- ---, CA XXXXX

SR -- XX XXXXXX

Dear Mr. G---:
Your letter of August 24, 1979 to our West Los Angeles office has been referred to the legal staff for reply. We apologize for our delay in answering your letter. You have requested our opinion as to the correct application of tax to a program you are initiating. As we understand it, The W--- H--- is a retail wine and beer shop. This fall, in addition to your regular selling activities you plan to present a series of educational wine tastings and seminars at your store. At each seminar you will present a 45 minute lecture dealing with the history and love of wine production and grape growing. Afterwards you will offer a comparative tasting of 8-12 wines. Wines will be served in one to two ounce portions to each student during the course of the evening. The wines will come from the store inventory. The fee for the seminars will be from $10 to $25 per student per evening. The value of the wines tested in each seminar will be in the range of 25-40 percent of the total price charged for each seminar. For purposes of analysis we will assume that all of the wines served at the seminar will have been purchased ex-tax under a resale certificate. We are of the opinion that the measure of tax should be a percentage of the total price of the seminars. As such, you should report and pay tax on the wine on this pro-rated basis. Please call or write Mr. Art Brown at our West Los Angeles office, 11870 Santa Monica Blvd., Los Angeles, CA (213) 879-0600 in regard to the exact measure of tax to be reported. Very truly yours,

Mary C. Armstrong
Staff Counsel
MCA:ba