Can an event planner buy tents, chairs, tables, and catering with a resale certificate and pay no tax on its own purchases, or must it pay tax on what it buys and only charge tax on its overall bill to the client?

Plain-English summary

UM Enterprises Ltd., doing business as Enchanted Parties, plans and produces events like weddings, bar mitzvahs, picnics, and house parties. For each event, it contracts with suppliers for tents, tables, chairs, and other rented items, sometimes arranges performers such as magicians or clowns, and sometimes hires a caterer to provide food and drink. UM Enterprises had been issuing resale certificates to all of its suppliers -- paying no tax on any of its purchases -- and then charging its clients sales tax on its entire bill (all its expenses plus its coordination fee). It asked the Department whether that was the right approach, and whether it could get a refund of any tax it had actually paid.

The Department said UM Enterprises' resale-certificate practice was wrong for the equipment rentals. A resale certificate is only valid when you're buying something to resell it as-is to your customer -- but UM Enterprises isn't reselling the tent, tables, and chairs to its clients; it's using them to provide its own event-planning and production service. So it should be paying tax to its suppliers on those rentals, not using a resale certificate.

Food and drink work differently. If an event includes food or drink, UM Enterprises' entire charge to the client for coordinating and catering the event is a taxable catering charge. Within that, UM Enterprises can buy plain grocery-type food (meat, vegetables, produce) tax-free, and it can also buy certain taxable items like candy, soft drinks, and alcohol for resale -- but only if those specific items are actually sold to the customer as part of the catering service. It cannot buy already-prepared food (like ready-made platters) for resale; tax must be paid on that food when purchased, though a credit is available on the sales tax return for tax paid on food that's later resold as part of a catered event.

Finally, if an event has no food or drink at all, UM Enterprises' charges for arranging non-food entertainment -- a band, magician, clown, or similar performer -- aren't subject to sales tax at all, because entertainment booking isn't one of the services New York's sales tax law taxes.

What this means for you

Event planners and party/wedding coordinators

Don't assume a resale certificate covers everything you rent for a client's event. Equipment you rent and then use to deliver your own planning/production service (tents, tables, chairs, linens) is taxable to you as the purchaser -- pay the tax to your supplier rather than trying to pass the whole thing through as a resale. Only actual resold food and beverage items, sold as part of a catering charge, qualify for resale treatment, and prepared food never does.

Caterers and event-service providers billing combined event packages

If your event includes food or drink, your entire charge for the event -- catering plus coordination -- is taxable as a catering service. Keep your entertainment-only charges (bands, performers) separate, since those are non-taxable when there's no food or drink involved.

Accountants and tax professionals

This ruling follows the caterer-purchase framework in 20 NYCRR § 527.8(f)(2) and § 527.8(i): self-use property (tents, chairs, linens) is always taxable to the purchaser; raw grocery food is exempt; taxable resale-eligible items (candy, soda, alcohol) can be bought for resale only if resold as part of the catering service; and prepared food purchased for resale is taxed at purchase with a credit available on resale.

Common questions

Q: Can an event planner use a resale certificate to buy tents, tables, and chairs tax-free?
A: No. Those items are used to provide the planner's own service, not resold as-is, so the planner must pay tax on them when purchased.

Q: Is an event planner's entire bill to a client taxable?
A: Only the portion tied to food and drink (the catering charge) is automatically taxable. Charges for booking entertainers like a band, magician, or clown, where there's no food or drink at the event, aren't taxable at all.

Q: Can a caterer buy prepared food for resale without paying tax upfront?
A: No. Prepared food must be purchased with tax paid, though the caterer can later claim a credit on its sales tax return for tax paid on prepared food that it resells as part of a catered event.

Q: Does this ruling apply to my event-planning or catering business?
A: Not automatically. An Advisory Opinion binds the Department only for the taxpayer and facts it was issued to, and it can't be relied on by anyone else. It illustrates the Department's reasoning, but your contracts and billing structure may differ.

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1998.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a98_21s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-98(21)S
Sales Tax

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S971015B

On October 15, 1997, a Petition for Advisory Opinion was received from UM
Enterprises Ltd., 711-5 Koehler Avenue, Ronkonkoma, New York 11779.
The issues raised by Petitioner, UM Enterprises Ltd., are whether:
(1) Property and services contracted for by Petitioner can be purchased for
resale.
(2) Petitioner is entitled to a refund or credit of sales and compensating
use tax paid on its purchases of property and services.
Petitioner submits the following facts.
Petitioner, which does business as Enchanted Parties, is in the business
of event planning and production. Petitioner plans events such as weddings, bar
mitzah, picnics and house parties.
An individual client contracts with
Petitioner to plan an event. Petitioner makes all necessary arrangements for the
event, based on its discussion with the client. As part of its responsibilities,
Petitioner contracts with various companies for such items of tangible personal
property as a tent (if the event is an outdoor function), tables, chairs and any
other items that are needed for the event. Petitioner may arrange for performers
such as magicians or clowns to entertain at events. Food and drink are provided
for some, but not all, events planned by Petitioner. Where food and drink are
provided, Petitioner generally hires a caterer to prepare and serve the food and
drink. Petitioner coordinates the various segments for the event and pays the
suppliers for the rentals, services and food and drink. Petitioner issues resale
certificates to all vendors and does not pay tax on its purchases, and charges
its clients sales tax on the cumulative total of Petitioner's expenses plus a fee
for the coordination of the event.
Applicable Law and Regulations
Section 1101(b)(4)(i) of the Tax Law defines the term "retail sale," in
part, as:
A sale of tangible personal property to any person for any
purpose, other than (A) for resale as such... or (B) for use by that
person in performing the services subject to tax under paragraphs
(1), (2), (3) and (5) of subdivision (c) of section eleven hundred
five . . .
Section 1105 of the Tax Law imposes sales tax upon:
(a) The receipts from every retail sale of tangible
property, except as otherwise provided in this article.

personal

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*
(c) The receipts from
following services:
*

*
every

*

*
sale,

except

for

resale,

of

the

*

(3) Installing tangible personal property, excluding a mobile home,
or maintaining, servicing or repairing tangible personal property,
including a mobile home, not held for sale in the regular course of
business, whether or not the services are performed directly or by
means of coin-operated equipment or by any other means, and whether
or not any tangible personal property is transferred in conjunction
therewith, except:
*

*

*

(d)(i) The receipts from every sale of beer, wine or other alcoholic
beverages or any other drink of any nature, or from every sale of
food and drink of any nature or of food alone, when sold in or by
restaurants, taverns or other establishments in this state, or by
caterers, including in the amount of such receipts any cover,
minimum, entertainment or other charge made to patrons or customers
(except those receipts taxed pursuant to subdivision (f) of this
section):
(1) in all instances where the sale is for consumption on the
premises where sold;
(2) in those instances where the vendor or any person whose
services are arranged for by the vendor, after the delivery of the
food or drink by or on behalf of the vendor for consumption off the
premises of the vendor, serves or assists in serving, cooks, heats
or provides other services with respect to the food or drink; and
(3) in those instances where the sale is for consumption off the
premises of the vendor, except where food (other than sandwiches)
or drink or both are (A) sold in an unheated state and, (B) are of
a type commonly sold for consumption off the premises and in the
same form and condition, quantities and packaging, in establishments
which are food stores other than those principally engaged in
selling foods prepared and ready to be eaten.
Section 527.8(f)(2) of the Sales and Use Tax Regulations provides, in part:
Purchases by caterers. (i) Self-use. Taxable tangible personal
property or services used or consumed by a caterer in performing
catering services are not purchased for resale as such and are
subject to tax. Examples of such taxable property are: tables,
tents, chairs, bars, linens, napkins, silverware, glassware,

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chinaware, serving utensils, table covers, ice used to chill food or
drinks before serving, as well as floral arrangements not purchased
in accordance with the conditions set forth in subparagraph (v) of
this paragraph. (Emphasis supplied)
(ii) Food and beverages for resale. Food, such as meat, vegetables,
fruit etc., may be purchased exempt from tax by a caterer in
accordance with section 528.2 of this Title. Food, such as candy and
confections, which is taxable in accordance with section 527.1 of
this Part and does not qualify for exemption from tax under section
528.2 of this Title, may be purchased for resale, and thus not
subject to tax, provided it is sold to the customer as part of the
catering service. (Emphasis supplied)
Beverages, such as fruit drinks, soft drinks, soda, cocktail mixers,
bottled water, beer, wine and other alcoholic beverages which are
taxable in accordance with section 527.1 of this Part and not exempt
under section 528.2(b) of this Title may be purchased for resale by
caterers provided that such beverages are sold to the customer as
part of the catering service. (Ice served in drinks may also be
purchased for resale.) (Emphasis supplied)
Example 4: A vendor has contracted to cater an outdoor party at a
private residence. The caterer is responsible for making all
arrangements for the customer such as providing a tent, tables,
chairs, linens, silverware, chinaware, napkins, glassware, portable
dance floor, bars, floral arrangements for the tables, a band,
serving personnel (who are employees of the caterer), food (roast
beef, salad, vegetables and dessert all prepared by the caterer),
alcoholic beverages, soft drinks and valet service. The caterer must
pay tax on any rental or purchase of the tent, tables, chairs,
linens, silverware, chinaware, napkins, glassware, portable dance
floor and bars, as well as any floral arrangements not purchased in
accordance with the conditions set forth in subparagraph (v) of this
paragraph.
The charges by the band and by the valet service are not taxable to
the caterer since they are not services subject to tax. The
caterer's purchases of the uncooked meat and the salad, vegetable
and dessert components are exempt from tax in accordance with
section 528.2 of this Title. The caterer's purchases of alcoholic
beverages and soft drinks are purchases for resale, not subject to
tax, in accordance with section 527.1(a) of this Title. The
caterer's entire charge to the customer is taxable.
*

*

*

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(iv) Taxable food or drink. Purchases by caterers of prepared food
or drink (taxable under subdivision (a) of this section) may not be
made for resale and are subject to tax at the time of purchase.
However, a caterer may take a credit on its sales tax return for the
tax paid on such food. (See subdivision (i) of this section for more
information on the purchase of food or drink for resale.)
(Emphasis supplied)
Example 5: A caterer has several parties at one time and is unable
to prepare all the food for the various groups. The caterer
purchases prepared meat platters and prepared hot and cold salads to
distribute to the various catered groups. Although the caterer may
not purchase the prepared food exempt from tax as a purchase for
resale, it may claim a credit when reporting its catered sales on
its sales tax return for the tax paid on the food.
Section 527.8(i) of the Sales Tax Regulations provides, in part:
Resale. (1) Any person purchasing food or drink for resale as such
is required to pay tax thereon at the time of purchase.
(2) When the food or drink is subsequently resold, the seller is
required to collect tax from the purchaser.
(3) The tax paid by the seller may be taken as a credit against the
tax
which the seller is required to collect and remit on the
subsequent sale. The credit is limited to the amount of tax actually
paid on the purchase by the seller of the food and drink resold.
Opinion
In this case, Petitioner makes all the arrangements for its clients'
events. Petitioner obtains a tent, if the event is outdoors, chairs, tables,
silverware, the catering service for food and drink, a band and any other items
needed for the event.
Petitioner has been issuing a resale certificate to
suppliers in order to make purchases tax exempt and then charging its clients tax
on its entire bill, covering the cost of Petitioner’s expenses and its fee.
Section 1105(a)of the Tax Law imposes a tax on the receipts from retail
sales of tangible personal property.
Section 1101(b)(4)(i) of the Tax Law
defines the term "retail sale" as the sale of tangible personal property to any
person for any purpose other than for resale as such or for use in performing
services taxable under paragraphs (1),(2),(3),(5),(7) and (8) of subdivision (c)
of Section 1105 of the Tax Law. Petitioner is not reselling to its clients the
tangible personal property it rents from suppliers. The rentals are used by
Petitioner in providing the total service package to its clients of planning and
producing the event. Petitioner is providing a taxable catering service under
Section 1105(d)(i) of the Tax Law, if there is food or drink served at the event.
If there is no food or drink at the event, Petitioner is providing a non­

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enumerated service which is not taxable. Accordingly, Petitioner's rentals of
tangible personal property are not for resale, and Petitioner should not furnish
resale certificates to its suppliers. (See Java Caterers, Inc., Dec St Tx Comm,
February 6, 1985, TSB-H-85(101)S).
Consequently, Petitioner should always pay
tax to its suppliers on the tangible personal property it rents.
Where Petitioner furnishes food and drink for an event, Petitioner’s
charges for catering the food and drink and any other charge for the coordination
of the event are subject to tax under Section 1105(d)(i) of the Tax Law. (See
Stouffer Management Food Service, Inc. v. Tully, 98 Misc 2d 1128, affd without
opn 69 AD2d 1023, mot for lv to app den 47 NY2d 709).
Petitioner may purchase food and non-alcoholic beverages exempt from tax,
under Section 1115(a)(1) of the Tax Law. Petitioner may purchase non-exempt food
and drink, such as candy and confections, fruit drinks, soft drinks, soda,
cocktail mixers, bottled water, beer, wine and other alcoholic beverages, for
resale, provided these items are sold to the customer as part of the catering
service (see Section 527.8(f)(2)(ii) of the Sales and Use Tax Regulations). In
accordance with Section 527.8(f)(2)(iv) of the Sales and Use Tax Regulations,
Petitioner cannot purchase prepared food and drink for resale, and must pay tax
to its supplier at the time of purchase. However, Petitioner may take a credit
on its sales tax return for the tax paid on such prepared food and drink. (See
Sections 527.8(f)(2) and 527.8(i) of the Sales and Use Tax Regulations regarding
the purchase of food or drink for resale.)
In those instances where Petitioner makes arrangements for an event and
there is no sale of food or drink involved, Petitioner is not performing one of
the enumerated taxable services under Section 1105 of the Tax Law.
Petitioner’s
charges to hire the services of a magician, clown, band or other performer are
not subject to sales tax.

DATED: March 24, 1998

NOTE:

/s/
JOHN W. BARTLETT
Deputy Director
Technical Services Bureau

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