Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
550.0000 TAXABLE SALES OF FOOD PRODUCTS—Regulation 1603
(f) SOCIAL CLUBS, FRATERNAL AND RELIGIOUS ORGANIZATIONS
550.1041 Religious Organization. A church plans to open and operate a cafeteria which will serve vegetarian lunches. The cafeteria will be located on the church's premises. The purpose of providing cafeteria service is to promote the congregation's spiritual needs, to work in unity with fellow members, and to provide a place for social gatherings, meetings for members, and fund raising. The cafeteria will be staffed by volunteers and all receipts from the sales of lunches will be used for the operation and maintenance of the church facilities. It is intended that the cafeteria's use will be restricted to members of the congregation. However, it could be used for senior citizen events or other community social services.
If the church qualifies as an organization, the property of which is exempt pursuant to subdivision (f) of section 3 of article XIII of California's State Constitution, the sales of vegetarian lunches for consumption on its premises will not be taxable during any period which it serves meals in conjunction with gatherings and events conducted by the church on behalf of the congregation.
However, if the church intends to open the cafeteria to the public on a regular basis (senior citizen events or other community social services), sales by the cafeteria during these periods will not be eligible for the exemption provided by section 6363.5, regardless of the fact that the receipts will be used for the church's operation and maintenance. 11/9/95.