NONPROFIT ORGANIZATIONS
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JANUARY 2023
• Trays, glasses, dishes, or other tableware for your customers’ use.
Example: Your organization sells ice cream sundaes at a free community fair where tables and chairs are available for
use by your customers. Your sales are taxable.
However, if you sell food products that would not ordinarily be eaten on-site— such as jars of jam, whole pies, or
packages of cookie dough—those sales are not taxable. If you make sales of this type, be sure to keep good records that
clearly indicate the type of products you sold (see Recordkeeping).
Special events involving food, meals, or refreshments
Special considerations for ticket pricing
Special events sponsored by your organization may include both taxable and nontaxable activities. Consequently, your
organization should be especially careful when providing food, drinks, prizes, admission to entertainment, etc., for a
single amount designated as a donation. Generally, if you charge a single donation for a fundraising event involving
taxable sales, the entire ticket charge will be taxable unless you do both of the following:
• List the taxable charges separately on the event tickets.
• Keep separate records of taxable and nontaxable charges.
Example: You hold a fundraising dinner, where the $75 ticket price includes dinner and drinks (that are taxable—
see below) and entertainment (that is not taxable). If your tickets list only one price, that full amount is taxable.
However, if the tickets state “Ticket price includes $35 for dinner and drinks” and your event income records reflect
this breakdown, tax would apply only to the $35 charge for dinner and drinks.
Please note: When your organization is not responsible for reporting and paying the tax for sales of meals at a
fundraising dinner or other event (as explained in the next section) you do not need to separate charges in this
manner.
Amounts you receive from tickets sold, but not used, are not taxable. You should keep records that show the difference
between any advance sales you make and the number of tickets actually turned in at your event.
Meals served at fundraising events
When your organization serves the meals
Tax generally applies to charges for drinks, food, and meals included in the ticket price of fundraising dinners or special
events. The business or organization that serves the meals at a fundraising event is responsible for reporting the taxable
sales and paying the tax due. If your organization serves the meals at your event, you are liable for the tax. This is true
whether the meals are furnished by members of your organization, purchased, or donated to you. Tax is due based on the
ticket price for the meal. As noted in the previous section, if the charge for the meal is not separately listed on the event
ticket, the entire ticket price is taxable.
When another business or organization serves the meals
If your organization contracts with someone else to serve the meals at your event, you generally are not responsible for
paying tax on your ticket sales. Instead, the business that serves the meals must report the sale of the meals and pay the
tax due, based on the amount they charge you.
For example, your organization might contract with a restaurant or hotel to provide and serve meals for a certain price.
The food server would be liable for the sales tax, based on the amount the server charged you for the meals.
Example: Your organization holds a fundraising dinner at the ballroom of a hotel with ticket prices of $100 each that
covers a meal, drinks, and entertainment. You contract with the hotel to provide and serve the meals and drinks for
$25 per person. Since the hotel serves the meals, it must pay sales tax based on the amount it charges you for the
meals and drinks ($25 each). Your organization does not owe tax on your ticket sales.
Refreshments served at event but not mentioned on the event tickets
If your tickets do not mention refreshments, and you serve only an insignificant amount of food or drink at your event,
your ticket sales are not taxable. For example, if you hold a Meet-the-Candidates Night and serve only coffee and tea, tax
would not apply to your income from ticket sales.