TX 9110L1135E10 Sales and/or Use Tax (State,Local,MTA) 1991-10-10

Were concession-stand food sales exempt when a school-associated group sold them as a fundraiser and kept all net proceeds for its exclusive use?

Short answer: Yes. Under the stated facts, the sales were exempt because the group was associated with a public or private elementary or secondary school, the sales were part of its sponsored fundraising drive, and all net proceeds went to the organization for its exclusive use.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 was associated with a public or private elementary or secondary school. It sold concession-stand food as part of a fundraising drive it sponsored, and all net proceeds went to the organization for its exclusive use.

Based on those facts, the Comptroller said the food sales were exempt under Texas Tax Code § 151.314(e)(1)-(3). The letter also enclosed Rule 3.293 on food, food products, meals, and food service.

What this means for you

The exemption depended on the seller's school association, the fundraising purpose, and exclusive use of all net proceeds. The opinion warned that different facts could change the result.

Common questions

Were these concession sales taxable? No. Did the group need to be school-associated? Yes. Could net proceeds go elsewhere? Not under the facts supporting this exemption.

Citations and references

Texas Tax Code § 151.314(e)(1)-(3) (school-group food-sale criteria)
Rule 3.293 (food, food products, meals, and food service)

Source

STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
Opinion: https://star.comptroller.texas.gov/view/9110L1135E10

Original ruling text

October 10, 1991

Dear **:

Thank you for you letter regarding the taxability of certain
concession stand sales.

Enclosed are copies of the Texas Sales and Use Tax Law and
Rule 3.293: Food; Food Products; Meals; Food Service. Food
sales made by your organization would be exempt from tax if
the sales meets the criteria set out in Texas Tax Code Section
151.314(e)(1), (2) and (3).

You asked about the taxability of concession stand sales made
by a group that is associated with a public or private elementary
or secondary school, the sales being a part of a fundraising
drive sponsored by the organization, and all net proceeds from
the sale going to the organization for its exclusive use. Based
on the facts presented, concession stand food sales made by the
group would be exempt from tax. If there are additional or
different facts, the opinion could change.

If you have any questions, please don't hesitate to write the
Tax Administration Division or call one of our tax specialists
toll free at 1-800-252-5555.

Sincerely,

Joan Hale
Tax Administration Division

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