61 Pa. Code § 60.17 - Sale of food and beverages by nonprofit associations which support sports programs
(a)
Definitions. The following words and terms, when used in this
section, have the following meanings, unless the context clearly indicates
otherwise:
Nonprofit association-
(i) An entity which is organized as a
nonprofit corporation or nonprofit unincorporated association under the laws of
the Commonwealth or the United States.
(ii) An entity which is authorized to do
business in this Commonwealth as a nonprofit corporation or unincorporated
association under the laws of the Commonwealth, and which is organized and
operated on a nonprofit basis, including the following associations or
separately chartered auxiliaries thereof:
(A)
Youth or athletic.
(B) Volunteer
fire.
(C) Ambulance.
(D) Religious.
(E) Charitable.
(F) Fraternal.
(G) Veterans.
(H) Civic.
Sports program-Subject to the limitations set forth in subparagraph (ii), a sports program shall include:
(i) Baseball, softball,
football, basketball, soccer and other competitive sports formally recognized
as a sport by one or more of the following:
(A) The United States Olympic Committee as
specified by and under the jurisdiction of the Amateur Sports Act of 1978
( 36 U.S.C.A. §§ 371 -
396 ).
(B) The Amateur Athletic Union.
(C) The National Collegiate Athletic
Association.
(ii) The
term is limited to a program or that portion of a program which meets the
following criteria:
(A) Organized for
recreational purposes and conducts activities substantially for these
purposes.
(B) Organized primarily
for participants who are 18 years of age or younger or whose 19th birthday
occurs during the year of participation or the competitive season, whichever is
longer. There is no age limitation for programs operated for persons with
physical handicaps or persons with mental retardation.
Support-The term means the following:
(i) The nonprofit
association sells food and beverages and uses the funds raised solely to pay
the expenses of a sports program.
(ii) The nonprofit association sells food and
beverages at a location where a sports program is being
conducted.
(b)
Scope.
(1) The sale of food
and beverages by nonprofit associations which support sports programs is not
subject to tax.
(2) The following
are examples of taxable and nontaxable sales by nonprofit associations:
(i) "F" fraternal association sells food and
beverages to fans from a food stand located on university property where
basketball games are played by members of the various fraternities, most of
whom are 20 years of age or older. Sales of food and beverages by "F" to fans
are taxable since the sports program is primarily for participants who are
older than 18 years of age.
(ii)
"A" charitable association operates a food stand four times a year at a public
park where food and beverages are sold to raise funds solely to pay the
expenses of a sports program. Since the funds raised from the sales of food and
beverages by "A" are used solely to support sports programs, these sales are
not subject to tax even though they are made from a location other than where
the sports program is being conducted.
(c)
Equipment and supplies.
(1) A vendor of food or beverages (which is
not otherwise an exempt organization under §
32.21 (relating to charitable,
volunteer firemen's and religious organizations, and nonprofit educational
institutions)) is required to pay tax upon the purchase of utilities,
equipment, fixtures, utensils-such as glasses, knives and forks, and
nondisposable plates and cups-table cloths, napkins, straws, returnable
containers and related supplies.
(2) The purchase of the following items in
connection with the sale of food or beverages is exempt from tax regardless of
whether the purchaser is an exempt entity under §
32.21:
(i) Prepared or nonprepared food and
beverages for resale.
(ii) Wrapping
supplies as defined by §
32.1 (relating to
definitions).
(3) The
following examples illustrate what items are and are not subject to tax:
(i) In connection with the sale of food and
beverages at a food stand where a sports program is being conducted, "N"
nonprofit association provides tables and chairs for its customers to use. "N"
is not an exempt organization under §
32.21. "N" shall pay tax on these
items at the time of purchase and may not claim the resale exemption even
though the invoices separately state the charges for these items.
(ii) In connection with the sale of food and
beverages at a food stand where a sports program is being conducted, "X"
nonprofit association provides to its customers paper plates, styrofoam cups,
straws, paper napkins, and plastic knives, forks and spoons. "X" is not an
exempt organization under §
32.21. "X" can purchase paper plates and
styrofoam cups exempt from tax on the basis that these items qualify as
wrapping supplies. "X" shall pay tax upon the purchase of straws, paper
napkins, and plastic knives, forks and spoons.
Notes
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