Were client charges for memorial entries in a society-owned Book of Remembrance taxable when clients could receive a card and wallet?
Apply this to your situation
This page answers the general question as of 1990. Ask about yours and see what current California tax law says, with citations.
Plain-English summary
A society maintained its own Book of Remembrance as a lasting memorial. For a client charge, it inscribed an entry under the date of death; longer entries could include an emblem, badge, or crest for an additional amount.
California agreed that the client charge was not taxable because the society retained the book and provided a memorial service rather than selling the book to the client.
A folded remembrance card and protective wallet could be furnished to a client as a copy of the inscription. That transfer did not change the overall transaction from a service into a property sale.
The society was the consumer of the property used in providing the service. Tax applied to sales of the Book of Remembrance and folded cards to the society. If someone other than the society's employee performed the hand lettering and inscription work, tax also applied to that person's charge to the society.
What this means for you
Memorial organizations
Retaining the memorial book and providing an entry service differed from selling the book itself; incidental client copies did not control the transaction.
Accountants and tax professionals
Track tax on the provider's book, cards, wallets, emblems, and contracted lettering even when the customer-facing memorial charge is nontaxable.
Common questions
Q: Were charges for memorial entries taxable?
A: No.
Q: Did a remembrance card and wallet make the client transaction taxable?
A: No.
Q: Was the society's purchase of the memorial book taxable?
A: Yes.
Q: Was outside hand lettering taxable?
A: Yes.
Source
- Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
- Annotation page: Annotation 515.0011.910
- Original supporting opinion: 515.0011.910 PDF
Original ruling text
(916) 445-3723
August 16, 1990
This is in response to your letter of August 9, 1990. We understand that the Society of will be maintaining a Book of Remembrance at its
~ m , to provide a lasting record and memorial. A memorial entry will be inscribed in the Book of Remembrance under the date of death. With entries of five or more lines, space is available to enhance the memorial by the inclusion, at extra cost, of emblems, badge~ or crests. You note that the Book of Remembrance is the personal property of t h e - S o c i e t y . You state the client receives no tangible p e r ~ o p e r t y . We note, however, that the brochure which you provided to us indicates that a folded remembrance card with a protective PVC coach-hide wallet is available to persons who wish to have a copy of the inscription as it appears in the book. We are in agreement with your analysis that the charges you make to your clients are not subject to sales tax. The Book of Remembrance is not sold to clients. The fact that a folded remembrance card may be furnished to the client does not change the overall nature of the transaction from a service transaction to a sale transaction. Tax thus applies to charges made to t h e - S o c i e t y for the Book of Remembrance and for folded remem~ards. We note that charges for hand lettering are subject to tax. Thus, if the lettering work is done by someone other than an employee of the - S o c i e t y , sales tax applies to the charge made to the Society for the lettering and inscription work. Very truly yours,
Ga.r y J. Jugurn
Atsistant Chief Counsel
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