Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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T

550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603

Annotation 550.0827

(e) CATERERS

550.0827 Event Planning Service. The taxpayer is an "event planning" business. It is hired by customers to coordinate large functions. When an event is booked, the taxpayer obtains various caterers and restaurants that cater the food. The caterer or restaurant sends the taxpayer an invoice and the taxpayer in turn sends an invoice to the customer. The taxpayer bills the customer the same amount the caterer or the restaurant invoices it. The taxpayer's compensation is obtained from the caterer or restaurant who pays the taxpayer a certain percentage of the total cost of food and beverage. The customer makes the check payable to the taxpayer.

Under these facts, the taxpayer is the person contracting with the customer for a sale. Therefore, the taxpayer is buying and selling for its own account and is not acting as an agent for the caterer or restaurant. Accordingly, the retail sale in this situation is the sale by the taxpayer to the customer and the taxpayer owes sales tax measured by the entire charge for catering collected from the customer. The taxpayer should issue "resale certificates" to the caterer or restaurant.

Furthermore, the taxpayer's event planning is a preliminary step in its contract to furnish the party supplies, meals, food and beverages for the event. In this situation, sales tax applies to the entire charge for furnishing the party supplies, meals, food, and beverages, including the charge for the taxpayer's labor in planning the event because the charge for the labor would be regarded as a charge for services that are part of the sale of tangible personal property. Such amounts are part of the taxpayer's taxable gross receipts from the sale of tangible personal property, even though such amounts are received from the caterer or restaurant. 11/28/95.