Ezel / Tax Rulings / TX
TX 9001L0974E05 Sales and/or Use Tax (State,Local,MTA) 1990-01-03

Could an exempt organization buy meals for weekly meetings without state and city sales tax, and was the hotel's room charge also exempt?

Short answer: The organization could exempt the qualifying meals with a properly completed exemption certificate. A hotel room-use charge remained subject to hotel occupancy tax because the organization did not qualify for that separate exemption.

Apply this to your situation

This page answers the general question as of 1990. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1990
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The organization could claim exemption from state and city sales tax on the weekly-meeting meals by issuing a properly completed exemption certificate.

A separate hotel charge for use of the meeting room fell under the hotel occupancy tax, and the organization did not qualify for exemption from that tax.

The letter also cautioned that an exempt organization does not receive exemption for every purchase. The item had to relate to the organization's exempt purpose.

Common questions

Were the meeting meals exempt? Yes, with a properly completed exemption certificate and the stated exempt-purpose connection.

Was the hotel meeting-room charge exempt too? No.

Did organizational exemption cover every purchase? No.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

January 3, 1990

Dear ***:

Thank you for your recent letter regarding the taxability of meals
purchased by your organization in conjunction with the weekly
meetings.

Your organization can claim exemption from the state and city
sales taxes on the meals you describe by issuing a properly com-
pleted exemption certificate. However, any charge by the hotel
for use of the room would come under the Hotel Occupancy Tax law,
and your organization does not qualify for exemption from that
tax.

Also be advised that not everything an exempt organization pur-
chases qualifies for sales and use tax exemption. To be nontax-
able, it must relate to the exempt purpose of the organization.

I have enclosed our rules on exempt organizations and exemption
certificates and our brochure on exempt entitles for your refer-
ence. Also included in a blank exemption certificate form for
your use.

This opinion is based on the facts presented. If there are addi-
tional or different facts, the opinion may change.

If you have any questions or need more information, please call me
toll free at 1-800-252-5555, ext. 34697. The regular number is
512/463-4697. You may write me at Tax Correspondence, Comptroller
of Public Accounts.

Sincerely,
Sandi Skaggs
Tax Correspondence Division

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