Did guest consumption defeat the student-and-teacher meal exemption when club members were charged for and paid for their guests' meals?

Plain-English summary

A club furnished meals to members' guests but charged the meals to, and received payment from, the members.

The memorandum applied the exemption for students' and teachers' meals even though guests actually consumed the food. It reasoned that the meals were sold to the paying members rather than to guests or outsiders.

The source therefore authorized processing the related refund claim. The annotation metadata describes the payers as students; the complete memorandum uses the broader word members, so this page does not silently substitute one term for the other.

Common questions

Did the guest's consumption control who bought the meal?

No. The memorandum focused on who was charged and paid.

Who did the source treat as the purchaser?

The club member, not the guest.

Did the memorandum approve the refund claim?

It said the claim appeared to be in order and could be processed.

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/550-1280.pdf

Original ruling text

State of California

Memorandum

To:

Mr. John B. Evans (CLB)

From:

E. H. Stetson

Subject:

The W--- F--- Club
--- of California --B---

Board of Equalization

550.1280
Sacramento
September 28, 1951

Account No. C-XXXX

It is our opinion that where meals are furnished to guests of members but are charged to and paid for by the members the exemption applicable to student’s and teacher’s meals is properly applied and no tax is due, even though the meals are actually consumed by guests. We believe such meals are not sold to the guests or outsiders but to the members. Accordingly, you may proceed to process the refund claim which appears to be in order.

EHS:ph