Does a church have to charge sales tax on cookbooks it sells occasionally from its office?

Plain-English summary

St. Paul's G.O. Church, a Greek Orthodox church, is a not-for-profit that is federally tax-exempt and holds a New York Exempt Organization Certificate. Parishioners produced two cookbooks from members' recipes, published and distributed by Doubleday and sold in bookstores. The church keeps only a small number on hand to fill occasional requests from parishioners, who may buy them at the office for less than retail. Because the sales are few and infrequent, the books are sold from the office safe whenever the keyholder is available, and the church's profits are negligible. The church asked whether these sales are taxable.

The Department held the sales are not taxable.

• Religious organizations aren't subject to sales tax. A not-for-profit organized and operated exclusively for religious purposes is not subject to the sales tax (§ 1116(a)(4)).
• But exempt-org sales can be taxable if made through a "shop or store." Sales of tangible personal property by such an organization are not taxable unless made through a shop or store (§ 1116(b)(1)).
• A "shop or store" means selling from a display, with regularity. The term covers any place where goods are sold from display with a degree of regularity, frequency, and continuity, and any temporary shop on the same premises as persons required to collect tax (20 NYCRR 529.7(i)(2)). (Example 3: a manned religious-articles counter open weekly is a shop or store.)
• These sales don't qualify. The occasional sales from the office safe are not made from a display with regularity, frequency, and continuity, and not in an area set aside for selling. So they are not through a shop or store and are not taxable (Lake Placid 1980 Olympic Games).
• But a display or an event would flip the result. If the church sold the cookbooks from a display at scheduled hours, or at events where vendors required to collect tax offer merchandise, those sales would be taxable, because each location would be a shop or store (Rochester Philharmonic Orchestra).

What this means for you

Being an exempt organization doesn't automatically exempt your sales. New York exempts a religious or other qualifying nonprofit from tax, but its sales of goods become taxable once they're made through a "shop or store."

Occasional, low-key sales usually aren't a "shop or store." Filling infrequent requests from an office, without a display or a dedicated selling area, generally falls outside the shop-or-store rule.

A regular display or a vendor event changes the answer. Set up a staffed table or booth with scheduled hours, or sell alongside taxable vendors at an event, and you've created a shop or store — collect tax on those sales.

Common questions

Q: Our church occasionally sells a few books from the office. Do we charge sales tax?
A: Generally no. Occasional sales not made from a display, and not in an area set aside for selling, aren't made through a "shop or store," so they aren't taxable for an exempt organization.

Q: When would our sales become taxable?
A: When you sell from a display with regularity — for example, a staffed table at scheduled hours — or at events where vendors required to collect tax offer merchandise. Those locations count as a shop or store.

Q: Does holding an Exempt Organization Certificate cover the sales too?
A: Not by itself. The certificate reflects the organization's exemption, but sales of tangible personal property are still taxable if made through a shop or store under § 1116(b)(1).

Citations and references

Statutes and regulations:

• Tax Law § 1105(a) — taxes the receipts from every retail sale of tangible personal property
• Tax Law § 1116(a)(4) — religious not-for-profit organizations are not subject to the sales tax
• Tax Law § 1116(b)(1) — exempt-organization sales of property are not taxable unless made through a shop or store
• 20 NYCRR 529.7(i)(2) — defines "shop or store" (sales from display with regularity, frequency, and continuity, or a temporary shop among taxable vendors)

Determinations cited:

• Lake Placid 1980 Olympic Games, Decision of the State Tax Commission, Oct. 3, 1985, TSB-H-85(232)S
• Rochester Philharmonic Orchestra, State Tax Commission Advisory Opinion, Nov. 10, 1981, TSB-A-81(56)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1987.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a86_53s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-86(53)S
Sales Tax
December 10, 1986

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S860721A

On July 21, 1986, a Petition for Advisory Opinion was received from St. Pauls G.O. Church,
110 Cathedral Avenue, Hempstead, NY 11550.
The issue raised is whether certain cook-books sold at the church's office are subject to sales
tax.
Petitioner, a Greek Orthodox Church, is a not-for-profit organization which is exempt from
federal taxation and has been issued an Exempt Organization Certificate by the New York State
Department of Taxation and Finance.
Based on recipes contributed by church members, Petitioner's parishioners have produced
the manuscripts of two cook-books ("The Art of Greek Cooking" and "The Regional Cuisines of
Greece") with the objective that any royalties earned would go to the church to supplement the
treasury. Published and distributed by Doubleday Inc., the books are now available in bookstores.
Petitioner states that the cook-books sold at the church represent a very small portion of the
total printing. They are kept on hand solely to fill requests of the parishioners who may purchase
the books at the church office for less than the suggested retail price. Since these purchases are few
and infrequent, the books are sold from storage in the office safe whenever the person who has
access to the safe is available. The church's profits from these sales are negligible.
Section 1105(a) of the Tax Law imposes a tax on "[t]he receipts from every retail sale of
tangible personal property, except as otherwise provided in this article."
Section 1116(a)(4) of the Tax Law provides that any not-for-profit corporation or association
organized and operated exclusively for religious purposes shall not be subject to the sales tax.
Tax Law Section 1116(b)(1) states further that sales of tangible personal property by such
an organization are not taxable unless made through a shop or store.
The Sales and Use Tax Regulations of the State Tax Commission define the terms "shop or
store" to include:
any place or establishment where goods are sold from display with a
degree of regularity, frequency and continuity as well as any place
where sales are made through a temporary shop or store located on
the same premises as persons required to collect tax.

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-86(53)S
Sales Tax
December 10, 1986

Example 3:

A counter is placed in an enclosed area at the back of a church for the
purpose of displaying religious articles for sale. The counter is open
for business each week for two hours on a specific day at which times
a clerk is present. The counter is in a separate area used solely to
display tangible personal property for sale and, thus, is a shop or
store. 20 NYCRR 529.7(i)(2).

The sales here at issue, as described by the Petitioner, are not made from a display with a
degree of regularity, frequency and continuity, nor do they take place in an area set aside for the
selling of tangible personal property. Such sales are not considered to be made through a shop or
store within the meaning and intent of the above quoted regulation section, and are therefore not
subject to the sales tax. See Lake Placid 1980 Olympic Games, Decision of the State Tax
Commission, Oct. 3, 1985, TSB-H-85(232)S.
However, if Petitioner were to sell the cook-books from a display at scheduled hours or at
events where vendors required to collect tax offer merchandise for sale, such sales would be taxable,
because each of these locations would be deemed a shop or store pursuant to the Tax Law. See
Rochester Philharmonic Orchestra, State Tax Commission Advisory Opinion, November 10, 1981,
TSB-A-81(56)S.

DATED: December 10, 1986

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.