Were religious pamphlets and tapes sold when the distributor requested a specified minimum donation?

Plain-English summary

A distributor gave religious pamphlets and tapes to anyone who asked and sent donation language with the materials. California focused on whether the request specified a price or minimum amount.

If a price or minimum donation was specified, the Board treated the materials as sold and measured tax by that price or minimum. If the request suggested no minimum and did not require a donation as a condition of obtaining or keeping the item, the transfer was not treated as a sale.

The opinion reported that the Board had checked other states' pertinent case law but found no court decision addressing the problem.

Common questions

Does the word “donation” prevent sales-tax treatment?

No. A payment tied to a specified price or minimum could be sale consideration despite the label.

What kind of request did not create a sale?

A general donation request that suggested no minimum and did not condition obtaining or keeping the materials on payment.

Did the source identify a court precedent for this rule?

No. It said no pertinent case dealing with the issue had been found.

Citations and references

• No numbered statute, regulation, or case citation appears in the official source

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/495-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/495-0370.pdf

Original ruling text

STATE OF CALIFORNIA

495.0370

STATE BOARD OF EQUALIZATION

October 16, 1972

X----------------------

Dear Mr. X-------------------:

From your letter of October 5, 1972, we understand you are primarily interested in knowing under what circumstances the pamphlets and religious tapes that you transfer to various individuals constitute a sale for sales and use tax purposes. The pamphlets and tapes are “given” away by you to anyone who asks. However, a suggested donation is printed on a piece of paper that you send with these pamphlets and tapes. For sales and use tax purposes, we will regard the pamphlets and tapes as sold by you if a price is specified including a situation in which a minimum “donation” is required. In such a case tax will be measured by the price or minimum donation requested. An item will not be regarded as sold if there is merely a request for a donation without in any way suggesting a minimum or that a “donation” is required as a condition of obtaining or keeping the item. We have checked the pertinent case law of the various states and have been unable to find any court cases that have dealt with this problem. Very truly yours,

Glenn L. Rigby
Tax Counsel
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