Were catered meals and soft drinks sold to students during the regular Texas school day taxable?

Plain-English summary

A caterer prepared breakfast, lunch, and snacks for students during the school year, and students paid for the food or meal tickets.

Meals and food products sold in the school during the regular school day were not taxable. The exemption included soft drinks.

The caterer had to keep separate, auditable records distinguishing school-day sales from other sales. Meals sold after the regular school day, such as at a fundraising supper, were taxable.

What this means for you

The time and setting of the sale mattered. The same seller needed records separating exempt regular-school-day transactions from taxable after-hours events.

Common questions

Were regular school-day meals taxable? No.

Were soft drinks included in the exemption? Yes.

Were after-school fundraising meals exempt? No.

What records were required? Separate records identifying school sales in a form that could be verified by audit.

Citations and references

The letter did not cite a specific statute or administrative rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9011L1058C08

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller November 6, 1990

Dear **:

Thank you for your letter regarding the taxability of food sales
based on the following facts:

** dba * has been retained by SCHOOL A as a
caterer of food for * students. **** has been
asked to prepare breakfast, lunch, and snack meals Monday thru
Friday for the 1990-1991 school year. We will be open approxi-
mately 176 school days per year.

As I understand from our telephone conversation, the students are
charged for the food or meal tickets.

The meals and food products that you sell in the school during the
regular school day are not taxable. The exemption from sales tax
includes soft drinks. You will be required to keep separate records
to clearly identify and distinguish the school sales from your oth-
er sales. The records must be such that can be verified by audit.

If you sell meals at time after the regular school day, i.e., at a
fund-raising supper, the sales tax must be collected.

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 additional information, you may
call toll free 1- 800- 252-5555 or the regular number 512/463-4600.
My extension is 3-4666. You may write to Tax Correspondence, Comp-
troller of Public Accounts.

Sincerely,
Jo Ann Dieck
Tax Correspondence