Was a charity wine-tasting admission fully taxable when the ticket included wine?

Plain-English summary

Board legal staff approved a district policy that generally taxed the full admission charge for a charitable wine-tasting party. The full-charge approach did not apply if the wine consumed by the donor or ticket buyer was insignificant compared with the admission price or if the organizer charged separately for the wine.

The memorandum acknowledged that the policy was open to reasonable attack but considered it legally supportable and consistent with prior legal-staff advice and a PTA fundraising guide.

It also described two limits. When only a fixed minimum donation was required and a donor voluntarily paid more, tax applied only to the minimum amount required to receive the tangible property. For a political fundraiser charging a very high price for a meal, tax applied only to the dinner's fair retail selling price.

Common questions

Was every dollar of wine-tasting admission taxable?

Generally yes, unless the wine was insignificant relative to admission or had a separate charge.

What if a donor voluntarily paid more than the required minimum?

The source taxed only the required minimum amount tied to receiving tangible personal property.

Did a high political-fundraiser ticket make the entire amount taxable as dinner?

No. The memorandum used the dinner's fair retail selling price.

Citations and references

• Fund Raising Sales Tax Guide for PTAs, Pamphlet No. 18 (October 1975) (as cited)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/550-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/550-0301.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

550.0301

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