Did a club avoid once-a-week meal-seller treatment by occasionally canceling a regularly scheduled weekly meeting?

Plain-English summary

A club regularly met once each week and sold meals. Tax counsel said occasional meetings missed because of holidays or other reasons did not change the club's once-a-week sales pattern. The number and regularity of the meetings made the meals taxable.

The memorandum described a practical administrative exemption—not one stated in the tax code—for a club or organization selling meals only to members less than once a week, on the theory that it was not engaged in the business of selling meals. Applying that practice remained a factual question.

This exact January 5, 1970 memorandum also supports Annotation 550.1000, which focuses on meals furnished to invited guests.

Common questions

Did the club need to hold exactly 52 meal meetings a year?

No. Occasional missed meetings did not defeat a regular weekly pattern.

Was the less-than-weekly practice a statutory exemption?

No. The source expressly said it was not provided in the code and rested on practical administration.

Citations and references

• The complete supporting memorandum cites no numbered statute, regulation, or case.

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/550-0960.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Eval & Planning (JAN)

From:

Tax Counsel (LAA)

550.0960

Date:

January 5, 1970

In response to your memo of December 18, 1969, I have reviewed your letter of December 11, 1969 to “G”. I concur in your conclusion that the meals are subject to tax, though not for both reasons which you cite. In my opinion, where the number of guests is limited specifically or impliedly, the meals are not available to the general public, and the guests never pay for their own meals, furnishing meals to guests of members should be considered furnishing the meals to members. Where the club regularly meets on a weekly schedule, the fact that meetings are occasionally not held does not change the fact that they sell meals on a once a week basis. In all such cases, it is a factual issue, but here the number of meetings and their regularity subjects them to tax. Apparently the reason we allow the exemption at all, since it is not provided for in the code, is that where the club or organization sells only to its members on a less than once a week basis they are not engaged in the business of selling meals. This is analogous to our rule in regard to boarding houses serving fewer than five paying guests. The soundness of the rule must be based in the avoidance of the practical problems which would arise were we to require such persons to register and file returns.

LAA:ph

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