Are concession stand sales by a school band booster club exempt from Texas sales tax?

Subject

Concession Stand Sales — School Booster Athletic Club Or Other School Group

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9407L1309G13

Plain-English Summary

The Texas Comptroller ruled that a school band boosters group's concession stand sales of food items during football games and band events are exempt from Texas sales tax. The exemption comes from Tax Code Section 151.314(e), which exempts sales of food products, candy, and carbonated beverages by a group associated with a public or private school if two conditions are met: (1) the sale is part of a fundraising drive sponsored by the group, and (2) all net proceeds go to the group for its exclusive use.

The letter also addressed a related question raised in an earlier phone call: admissions charged for public school band and drum-and-bugle-corps competitions are likewise exempt from sales tax.

What This Means For You

School booster clubs and parent organizations

If your booster club, PTA, or similar group associated with a public or private school runs a concession stand as a fundraiser at football games, band events, or other school activities, food and beverage sales can be exempt from Texas sales tax — as long as the sale is part of a fundraising drive the group sponsors and all net proceeds are used exclusively by the group. Keep records showing how the proceeds are spent, since that link to the group's exclusive use is part of the statutory test.

Schools and event organizers

Admissions charged for public school band and drum-and-bugle-corps competitions are exempt from sales tax, so schools and booster groups do not need to collect sales tax on entry fees to these events.

Accountants and tax professionals

The exemption in Tex. Tax Code § 151.314(e) is narrow: it applies only to food products, candy, and carbonated beverages (not necessarily every item a concession stand might sell), only when tied to a fundraising drive sponsored by a qualifying school-associated group, and only when net proceeds go to that group's exclusive use. This 1994 letter ruling is fact-specific and was issued to a particular taxpayer, so similar but distinguishable facts (e.g., a for-profit vendor operating the stand, or proceeds not going to the group) could yield a different result.

Q&A

Q: Do school band booster clubs have to charge sales tax on concession stand food sales?
A: No, not if the sales are part of a fundraising drive sponsored by the group and all net proceeds go to the group for its exclusive use. Under Tex. Tax Code § 151.314(e), such food, candy, and carbonated beverage sales by a group associated with a public or private school are exempt from Texas sales tax.

Q: Are admission fees to school band competitions taxable in Texas?
A: No. This ruling confirms that admissions to public school band and drum-and-bugle-corps competitions are exempt from Texas sales tax.

Q: Can any organization rely on this letter ruling?
A: Not directly. Texas letter rulings on STAR can support a detrimental reliance claim only for the taxpayer to whom the letter was issued, and policy may have changed since 1994. Other booster clubs or school groups with similar facts should confirm current treatment with the Comptroller's office or a tax professional rather than relying on this letter itself.

Citations

• Tex. Tax Code § 151.314(e) (exemption for food products, candy, and carbonated beverages sold by a group associated with a public or private school as part of a fundraising drive, with net proceeds for the group's exclusive use)

Original ruling text

July 14, 1994

Dear **:

Thank you for your recent letter regarding the tax treatment
of concession stand sales made by the band boosters during
football games and band events.

Such sales of food items are exempt from sales tax. Tax Code
Section 151.314(e) exempts from tax sales of food products,
candy, and carbonated beverages by a group associated with a
public or private school if:

• the sales is part of a fund raising drive sponsored by the
  group, and

• all net proceeds go to the group for its exclusive use.

I am enclosing the text of Tax Code Section 151.314 as an
addendum to this letter.

We discussed the taxability of admissions to public school
band and drum and bugle corps competitions in an earlier
telephone conversation. For the record, the sale of such
admissions are exempt from sales tax.

This opinion is rendered based on the facts you submitted.
Other facts, though similar, may yield different results.

You may call me toll free at 1-800-531-5441, ext. 3-4680.
The direct line is 512/463-4680. You may also write to Tax
Administration, Comptroller of Public Accounts.

Sincerely,

Al Van Allen
Tax Administration Division

NOTE: Previous Accession Number 9407472L