How much of a charity wine-tasting admission charge did California treat as taxable?

Plain-English summary

The Fresno District Administrator's November 13, 1975 memorandum described a policy taxing the entire charge for a wine-tasting party. Headquarters Legal agreed, subject to two alternatives: proof that wine consumed by the donor or ticket purchaser was insignificant relative to admission price, or a separate wine charge. The underlying district memorandum is not in the published source.

The headquarters memorandum said this matched advice in the October 1975 Fund Raising Sales Tax Guide for PTAs, Pamphlet No. 18, and prior legal-staff advice to taxpayers. Neither the pamphlet nor prior advice is included. The author admitted the position was subject to reasonable attack but considered it legally supportable.

The memorandum used two comparisons. When tangible personal property required only a fixed minimum donation but the payer could voluntarily give more, the taxable amount was only the required minimum. In political fundraising where someone might pay $250 for a chicken dinner, the taxable amount was only the dinner's fair retail selling price. Headquarters viewed both as reasonable applications of the district policy.

Source and live-annotation limits

The official PDF does not include the November 13 district memorandum, October 1975 Pamphlet 18, prior legal advice, charity or governing records, any wine-tasting announcement or event, wine, donors or ticket purchasers, admission terms or prices, consumption records, proof or calculation of insignificance, separate wine charge, minimum-donation offer or property, voluntary excess payment, political fundraiser, chicken dinner, fair-value support, tickets, receipts, invoices, returns, exemption documentation, tax calculations or payments, audit, assessment, claim, appeal, policy implementation, or later outcome. The charity, event, wine, people, property, political fundraiser, transactions, quantities, prices other than the illustrative $250 payment, values, donations, and tax amounts are unidentified, illustrative, or undocumented.

The source prints advise given rather than advice; the original-text section preserves that published wording.

The live annotation recasts the internal policy as a charity organization hosting a party and refers to the cost of the wine consumed by the attendee. The supporting memorandum identifies no charity or actual event, says wine consumed by the donor or ticket purchaser, and does not use wine cost as the comparison. The live annotation preserves the wine-tasting admission, entire-charge policy, insignificance and separate-charge alternatives, date, and tax result. It omits the requester and internal author, November 13 memorandum, Pamphlet 18 and prior taxpayer advice, reasonable-attack caveat, minimum versus voluntary donation example, tangible-property condition, political $250 chicken-dinner example and fair-retail-price measure, missing records, source wording, and absent implementation and outcome.

What this means for you

Charities, event organizers, wineries, and tax professionals

Preserve admission and donation terms, ticket language, each wine and amount consumed, pricing and valuation support, any separate wine charge, property furnished for required minimums, voluntary excess amounts, meals and fair retail values, receipts, invoices, returns, exemption documents, tax calculations, and payments. The memorandum supplies no numerical insignificance threshold, so do not invent one.

Common questions

Was the full wine-tasting admission generally taxable?

Yes, under the policy approved in the memorandum.

What if attendees could voluntarily donate more than a required minimum?

Only the required minimum was treated as taxable consideration for receiving the property.

How were high-priced political fundraising dinners treated?

The memorandum said only the fair retail selling price of the dinner was taxed.

Did the memorandum define insignificant?

No.

Did it document an actual charity wine tasting?

No. It approved a district policy described in an absent memorandum.

Was the policy presented as beyond dispute?

No. Headquarters called it legally supportable but acknowledged reasonable attack.

Citations and references

• November 13, 1975 Fresno District memorandum describing its wine-tasting admission policy — not included
• Fund Raising Sales Tax Guide for PTAs, Pamphlet No. 18 (October 1975) — not included
• Prior Board legal-staff advice to taxpayers — dates, recipients, forms, and copies not supplied
• Charity, event, wine, admission, donation, political-dinner, valuation, and tax records; and implementation or outcome — implicated but not documented

Verbatim support

From the official headquarters legal memorandum:

We agree with your policy. It coincides with the advise given in the Fund Raising Sales Tax Guide for PTAs (Pamphlet No. 18, October 1975) and given to taxpayers by the legal staff in the past.

Admittedly, it is subject to reasonable attack, but we believe it is a legally supportable position.

In cases in which only a fixed minimum donation is required, but the donation may be higher on a voluntary basis, we tax only the amount of the minimum donation required to receive the tangible personal property.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/390-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/390-0400.pdf

Original ruling text

State of California

Memorandum

To:

J. B. Caldwell
Fresno – District Administrator

From:

Headquarters – Legal (DJH)

Subject:

Charitable Organizations – Wine Tasting Parties

Board of Equalization

390.0400

November 17, 1975

We are replying to your memo of 13 November 1975 regarding your policy of taxing the entire charge for a wine tasting party unless it can be demonstrated that the wine consumed by the donor or ticket purchaser is insignificant in relation to the price of admission or a separate charge is made for the wine. We agree with your policy. It coincides with the advise given in the Fund Raising Sales Tax Guide for PTAs (Pamphlet No. 18, October 1975) and given to taxpayers by the legal staff in the past. Admittedly, it is subject to reasonable attack, but we believe it is a legally supportable position. In cases in which only a fixed minimum donation is required, but the donation may be higher on a voluntary basis, we tax only the amount of the minimum donation required to receive the tangible personal property. And in political fund raising, where $250 may be paid for a chicken dinner, we tax only the fair retail selling price of the dinner. But we believe both of these situations are within a reasonable interpretation of your policy as above stated.

DJH:rt

cc:

J. D. Dotson
G. Rigby
D. Pardun