Were catered meals at religious functions exempt when the organization used them for fundraising, social receptions, or free hospitality?

Plain-English summary

A caterer asked how tax applied to meals served at religious functions. The letter said the religious-organization exemption covered meals served to obtain revenue for the organization's functions and activities, and extended that treatment to the caterer's sale of the meals to the organization.

The exemption was limited to fundraising functions. It did not cover wedding receptions, bar mitzvah receptions, or other social events. It also did not apply when the religious organization charged invitees nothing, because serving free meals was not intended to raise revenue.

The letter separately quoted historical refund deadlines under section 6902 for any overpayment claim.

Common questions

Did the caterer's sale qualify when the religious organization resold meals at a fundraiser?

Yes. The source extended the exemption to that caterer-to-organization sale.

Were wedding or bar mitzvah receptions fundraising functions?

No. The letter treated them as social functions outside the exemption.

What if invitees paid nothing?

The exemption did not apply because the meals were not served to raise revenue.

Citations and references

• California Revenue and Taxation Code section 6902 (as cited)
• Board Ruling 52(j), later Regulation 1603(l) (as identified in the 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/550-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/550-1060.pdf

Original ruling text

550.1060

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)

April 23, 1970

--- --- ----- --- ----- --- --Gentlemen:
This is in response to your letter of April 15 asking the correct application of tax to meals served by you at religious functions. You will note that Ruling 52(j) [now Reg. 1603(l)] exempts meals sold by religious organizations if the purpose in serving the meals is to obtain revenue for the functions and activities of the organization. This exemption extends to meals sold by a caterer to the religious organization. However, the exemption is limited to meals served at “fund-raising” functions and does not extend to receipts from receptions following weddings, bar mitzvahs or other social functions. If the religious organization does not charge their invitees, as in the example in your letter, then the purpose of serving the meals is obviously not to raise revenue and the exemption would not apply. If you are entitled to any refund, Revenue and Taxation Code Section 6902 limits the period for which refunds may be granted to three years from the last day of the month following the close of the quarterly period for which the overpayment was made, or, if a determination was made for any past period, to six months after the determination became final, whichever period expires later. Very truly yours,

Lawrence A. Augusta
Tax Counsel

LAA:ph

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