Did a senior condominium or homeowners association qualify for the meal exemption by serving food in a common dining area?

Plain-English summary

At a November 14, 1979 public hearing on Regulation 1503 amendments implementing Assembly Bill 1497, a redacted participant proposed adding “condominiums or homeowners associations owning equal shares in common kitchen facilities.” The Board instead adopted the bill's language the next day, operative January 1, 1980, for a house or institution supplying board and room at a flat monthly rate and serving exclusively as the principal residence of persons age 62 or older.

Serving meals in a common dining area did not make a condominium or homeowners association such a house or institution.

Each condominium was separately owned, with purchase payments or rent made separately. The homeowners association managed common areas but did not supply the residents' rooms. Either entity might supply meals, but neither supplied both room and board as the regulation required.

The letter therefore treated their meal sales as taxable and declined to add condominiums or associations to the regulation adopted after the 1979 public hearing.

The PDF supplies no hearing record, final filed regulation, participant's community facts, transaction, challenge, or later outcome.

Common questions

Did a shared kitchen or dining room establish room and board?

No. Common meal facilities did not mean the entity supplied the separately owned rooms.

Could the homeowners association qualify by managing common areas?

No. The letter said it did not supply room.

What regulatory language controlled?

The adopted rule covered a house or institution supplying board and room for a flat monthly rate as a principal residence exclusively for people age 62 or older.

Citations and references

• Assembly Bill 1497, Statutes 1979, chapter 1048, and California Revenue and Taxation Code section 6363.6 — identified for the senior-residence meal exemption; bill, enrolled text, legislative history, complete statute, effective provisions, and later history not reproduced
• California Sales and Use Tax Regulation 1503(a)(3) — adopted November 15, 1979 with quoted language and operative January 1, 1980; complete regulation, rulemaking record, filed text, approval, and later history not supplied
• California Civil Code section 783 — quoted in part for the condominium ownership definition; complete text, version, omitted language, and later history not supplied
• November 14, 1979 redacted request and public-hearing proposal to include condominiums or homeowners associations owning equal shares in common kitchen facilities — request, hearing notice, staff materials, transcript, exhibits, proposal, public comments, motion, vote, and participant's community facts not reproduced
• November 21, 1979 Staff Counsel Mary C. Armstrong response concluding that condominiums and associations could provide meals or board but not room, because units were separately owned and paid for, so their meal sales remained taxable — no requester reply, community transaction, audit, assessment, refund claim, rulemaking challenge, or later outcome supplied
• Official Annotation 300.0010's condominium-or-association, common dining, no room-and-board, Regulation 1503, senior principal residence, and November 21, 1979 rules — annotation omits the November 14 request and hearing provenance, exact proposed language, AB 1497 and section 6363.6, November 15 adoption and January 1, 1980 operative date, Civil Code definition, separate-ownership analysis, absent rulemaking and community records, later outcome, and reliance status and supplies no additional proceeding 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/300-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/300-0010.pdf

Original ruling text

300.0010

STATE OF CALIFORNIA

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

November 21, 1979
--- --- ----- --- ----- --- ----- --- --Dear ---:
This is in response to your request of November 14, 1979 concerning proposed amendments to Sales and Use Tax Regulation 1503. On November 14, 1979, a public hearing was held in connection with proposed amendments to Regulation 1503. The proposed amendments incorporated 1979 legislative amendments (AB 1497, Stats. 1979, Chap. 1048) to Revenue and Taxation Code Section 6363.6 which exempts the sale or consumption of meals to residents which is the principal residence for persons 62 years of age or older. At the hearing you proposed that paragraph (a)(3) of Regulation 1503 be revised to include “condominiums or homeowners associations owning equal shares in common kitchen facilities.” On November 15, 1979, after due consideration of ---’s proposed language, the Board adopted the following amendments to Regulation 1503: “(3) Operative January 1, 1980, any house or institution supplying board and room for a flat monthly rate and serving as a principal residence exclusively for persons 62 years of age or older.” The amendment the Board adopted is identical to the language contained in Assembly Bill 1497. As adopted, Regulation 1503(a)(3) requires houses and institutions qualifying under this section to supply “board and room for a flat monthly rate.” As we understand it, a condominium or homeowner’s association owning equal shares in common kitchen facilities would not be considered to be supplying “board and room.” A condominium, as defined in Civil Code Section 783, is “an estate in real property consisting of an undivided interest in common in a portion of a parcel of real property together with a separate interest in space in a residential….Building.” A homeowner’s association is the corporate entity generally set up to manage the common areas of a condominium. .

--- ---

-2-

November 21, 1979
300.0010

We are of the opinion that the very nature of a condominium as a separate interest in real property precludes the possibility that a condominium would ever be considered to be supplying both “room and board” since each condominium is a separate unit which is separately owned and rents or payments for the purchase of the condominium are separately made. Nor can we foresee any situation where a homeowner’s association could be considered to be supplying “room and board.” Each of these entities might supply meals or “board” to persons in common dining areas; however, they are not supplying “room,” as required in Regulation 1503. As such, condominiums and associations are not properly includible in Regulation 1503(a)(3) and tax properly applies to the sale of meals by these organizations. If you have further questions concerning this matter, please write this office. Very truly yours,

Mary C. Armstrong
Staff Counsel