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550.0000 Taxable Sales of Food Products—Regulation 1603

Annotation 550.1036

(f) Social Clubs, Fraternal and Religious Organizations

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550.1036 Religious Organization. One of the conditions that must be met in order for sales of meals to be exempt from tax pursuant to Regulation 1603(l) is that the purpose in furnishing or serving the meals as food products is to obtain revenue for the functions and activities of the organization. For meals sold at religious camps, the failure to meet the above requirement is why the meals are not exempt under Regulation 1603(l).

The Board's experience with such camps is that the meals would be served even if the revenue from the meals did not fully cover their cost. The camp participants must be fed, and it is usually impossible, or at least impractical, for them to obtain meals elsewhere while attending camp. In no sense are the meals served for the specific purpose of raising revenue, as is required by the express language of the regulation. The meals served in camps are a continuing necessity of camp life and the revenue usually covers the cost of meals, but such meals would, in all likelihood, be served even if a loss were incurred.

Furthermore, the language "social or other gathering" in Regulation 1603(l) applies to activities such as church luncheons or dinners conducted for the express purpose of fund raising. It does not include activities within which the meals are an incidental part of continuing operations which have as their purpose religious education and which would be held even if no financial profit were expected. 9/21/71.