LR 8315
Purchases by Non-Profit Fraternal Order for Meetings Are Exempt from Sales Tax
August 30, 2024
Dear Applicant:
This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your request received July 15, 2024.
The facts as presented in your letter ruling request and communications with the Director's counsel are summarized as follows:
Applicant has received previous letter rulings regarding the taxability of purchases of hotel rooms and other items within its exempt functions and activities. Applicant is applying for a renewal of the most recent letter ruling issued on August 21, 2021. Applicant's exempt status and the scope of its civic functions and activities have not changed since that ruling was issued.
Applicant is a 501(c)(10) non-profit organization and fraternal order devoted to charitable, educational, and fraternal purposes. The Department of Revenue has recognized Applicant as a civic organization and has issued Applicant a limited exemption letter from sales and use tax on purchases and sales made within its civic functions and activities.
Applicant purchases hotel rooms for officers, special guests, and authorized representatives, as well as meals, costs of printing and distributing programs, and other miscellaneous expenses to conduct its various activities in Missouri. Specifically, Applicant makes these purchases for its annual and special meetings of the organization. The purpose of these meetings is to discuss and make decisions regarding its charitable, educational, and fraternal purposes.
Applicant makes all reservations for the officers, special guests, and authorized representatives, and it pays the hotel directly for their expenses, including meals. Additionally, Applicant pays the printing costs directly to the vendor prior to the annual meeting. This printing consists of the "Program of Events" for the meeting, and "Reports of the Charitable Institutions", and any resolutions, decisions, and edicts related to Applicant and its charities that are to be discussed or voted at the annual meeting.
ISSUE:
Are Applicant's purchases of hotel rooms, meals, printing and distributing of programs and materials, and miscellaneous related expenses for its annual and special meetings exempt from state and local sales tax?
RESPONSE:
Yes. Applicant's purchases of hotel rooms, meals, printing and distributing of programs and materials, and miscellaneous related expenses for its annual and special meetings are exempt from state and local sales tax because the purchases are made within Applicant's exempt civic functions and activities.
Section 144.020.1, RSMo, imposes a sales tax "[u]pon every retail sale in this state of tangible personal property[.]" Section 144.020.1(6), RSMo, imposes "[a] tax equivalent to four percent on the amount of sales or charges for all rooms, meals and drinks furnished at any hotel [...] in which rooms, meals or drinks are regularly served to the public."
Section 144.030.2(20), RSMo, exempts from state and local sales tax and state and local use tax "[...] all sales made by or to not-for-profit civic, social, service or fraternal organizations, including fraternal organizations which have been declared tax-exempt organizations pursuant to Section 501(c)(8) or (10) of the 1986 Internal Revenue Code, as amended, in their civic or charitable functions and activities[.]"
The Department of Revenue has recognized Applicant as a civic organization and has issued Applicant a limited exemption letter from sales and use tax on purchases and sales made within its civic functions and activities. Applicant purchases hotel rooms for officers, special guests, and authorized representatives, as well as meals, costs of printing and distributing programs, and other miscellaneous expenses to conduct its various activities in Missouri. Applicant makes all reservations for the officers, special guests and authorized representatives, and it pays the hotel directly for their expenses, including meals. Additionally, Applicant pays the printing costs directly to the vendor prior to the annual meeting. This printing consists of the "Program of Events" for the meeting, and "Reports of the Charitable Institutions," and any resolutions, decisions, and edicts related to Applicant and its charities that are to be discussed or voted at the annual meeting. These purchases are made for annual and special meetings of the organization whereby it discusses and makes decisions regarding its charitable, educational, and fraternal purposes. Therefore, Applicant's purchases for its meetings are exempt from sales tax because they are paid for by Applicant and are within its civic functions and activities.
This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals. If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change. For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.
Should additional information be needed, please contact Senior Counsel, Benjamin C. Slawson, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475 (Telephone 573-751-0961), or me.
Sincerely,
Wayne Wallingford