Is a caterer's separately billed charge for a wedding-ceremony room taxable, when the ceremony happens in one room and the catered reception happens in another room at the same venue?

Plain-English summary

Atrium Kosher Catering caters weddings and gives couples the option to hold the ceremony outdoors, in the ballroom, or in a dedicated "ceremony room" set up with chairs for guests. After the ceremony, everyone moves to the ballroom for the reception meal — the ceremony room isn't used again afterward. Atrium already collects sales tax on its entire catering fee, but bills the optional ceremony-room use as a separate line-item charge and asked whether that separate charge is also taxable.

New York taxes receipts from food and drink sold by caterers, and the statute specifically reaches "any cover, minimum, entertainment or other charge" billed to patrons in connection with the meal — not just the food itself. The Department's regulations give an on-point example: a caterer that bills separately for music, kosher supervision, bartenders, waitstaff, and coat-checking at a wedding must charge tax on all of those add-ons, because they're part of one catered event.

The Department treated the ceremony-room fee the same way. Its reasoning: the outcome shouldn't change based on how the venue happens to be laid out — if Atrium's whole operation were one banquet hall rented for an extra half-hour before the reception to accommodate the ceremony, that time would obviously be part of the taxable catering charge. Splitting the ceremony into a physically separate room and billing it as a distinct line item doesn't change the economic reality: the room is offered in connection with, and as part of, the overall catered wedding event, which should be viewed as a whole rather than broken into separately taxed and untaxed pieces. So the ceremony-room charge is an "other charge" under § 1105(d)(i) and is taxable along with everything else.

What this means for you

Caterers and banquet-hall operators

Separately stating a charge on the invoice doesn't automatically make it nontaxable. If a fee is for something offered in connection with a catered meal — a ceremony room, entertainment, staffing, or similar add-ons — expect it to be swept into the same taxable receipts as the food itself.

Wedding and event venues with multiple rooms

Having physically distinct spaces for different parts of an event (ceremony vs. reception) doesn't split the transaction into taxable and nontaxable halves. The Department looks at whether the extra charge is connected to the overall catered event, not at which room it happened in.

Accountants and tax professionals

This is a useful citation for the "look at the whole event, not its components" principle under § 1105(d)(i) — cite alongside Matter of Hunts Point Palace, Inc. whenever a caterer bills ancillary charges (room use, staffing, entertainment) separately from the core food and drink charge.

Common questions

Q: If I bill a charge separately from my catering fee, does that keep it out of sales tax?
A: Not by itself. Separately stating a charge doesn't change its taxability if it's connected to the catered event — the Department looks at the whole transaction.

Q: Would the answer differ if the ceremony and reception were both in the same single room?
A: No — the opinion specifically says the result would be the same as if the caterer had rented one banquet hall for extra time to fit in the ceremony beforehand.

Q: Are all "other charges" billed by a caterer automatically taxable?
A: Charges connected to the catered food-and-drink event (staffing, entertainment, room use, kosher supervision, coat-check) are taxable as "other charges" under § 1105(d)(i). A charge for something genuinely unrelated to the catered event could be analyzed differently, but that wasn't the fact pattern here.

Citations and references

Statutes and regulations:

• Tax Law § 1105(d)(i) (tax on food/drink sold by restaurants, taverns, caterers, including cover/minimum/entertainment/other charges)
• 20 NYCRR § 527.8 (imposition; premises; consumption on/off premises; caterers)

Prior rulings referenced:

• Matter of Hunts Point Palace, Inc., TSB-H-86(138)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2003.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a03_20s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-03(20)S
Sales Tax
May 8, 2003

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S020422A

On April 22, 2002, the Department of Taxation and Finance received a Petition for Advisory
Opinion from Atrium Kosher Catering, Ltd., 7 Route 59, Monsey, NY 10952.
The issue raised by Petitioner, Atrium Kosher Catering, Ltd., is whether a separately stated
charge for the rental of a room in which a wedding ceremony is performed is subject to sales tax
when such charge is in connection with the catering of the wedding reception in another room at the
same location.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner is in the catering business. When Petitioner contracts to cater a wedding, the
customer has the option of having the wedding ceremony either outdoors, in the ballroom, or in a
special “ceremony room” where chairs are arranged for all of the guests who wish to view the
ceremony. After the ceremony, all of the guests return to the ballroom where the meals are served.
The “ceremony room” is not used by the wedding party and guests after the ceremony is completed.
Petitioner collects sales tax on the entire fee it charges for catering a wedding. However,
there is an additional charge for the “ceremony room,” which is billed separately.
Applicable Law and Regulations
Section 1105(d)(i) of the Tax Law imposes sales tax on:
The receipts from every sale of beer, wine or other alcoholic beverages or any
other drink of any nature, or from every sale of food and drink of any nature or of
food alone, when sold in or by restaurants, taverns or other establishments in this
state, or by caterers, including in the amount of such receipts any cover, minimum,
entertainment or other charge made to patrons or customers (except those receipts
taxed pursuant to subdivision (f) of this section):
(1) in all instances where the sale is for consumption on the premises where
sold;
(2) in those instances where the vendor or any person whose services are
arranged for by the vendor, after the delivery of the food or drink by or on behalf of
the vendor for consumption off the premises of the vendor, serves or assists in
serving, cooks, heats or provides other services with respect to the food or drink. . . .

-2­
TSB-A-03(20)S
Sales Tax
May 8, 2003
Section 527.8 of the Sales and Use Tax Regulations provides, in part:
(a) Imposition. Sales tax is imposed on the receipts, including any cover,
minimum, entertainment or other charge, from every sale of beer, wine or other
alcoholic beverages and food or drink of any nature sold in or by restaurants, taverns
or other establishments in this State or by caterers:
(1) in all instances where the sale is for consumption on the premises
where sold;
(2) in those instances where the sale is for consumption off the
premises and the vendor (or someone acting on behalf of the vendor) after
delivery either serves or assists in serving, cooks, heats or provides services
with respect to the food or drink . . .
*

*

*

(c) Premises. The term premises shall mean the total space and facilities in
or on which the vendor conducts his business, including but not limited to parking
areas for the convenience of in-car consumption, counter space, indoor or outdoor
tables, chairs, benches and similar conveniences.
(d) Consumption on premises. The phrase for consumption on the premises
shall mean that the food or drink sold may be consumed on the premises where the
vendor conducts his business.
(e) Consumption off premises. The phrase for consumption off the premises
shall mean that the food, including sandwiches, or drink is intended to be consumed
at a place away from the vendor’s premises.
*

*

*

(f) Caterers. (1) Sales by caterers.
(i) All charges by caterers selling food or drink who provide serving or
assistance in serving, cooking, heating or other services after delivery are taxable.
(Emphasis added)
*

*

*

(iii) Sales of food or drink by caterers where the caterers deliver the items
purchased and arrange the food on platters or place the drink in containers so that
food or drink is ready to serve guests are taxable.

-3­
TSB-A-03(20)S
Sales Tax
May 8, 2003
Example 1:

A vendor has contracted to cater a wedding party at a private
hall. The caterer will furnish food and drink, music, kosher
supervision, bartenders, waiters and waitresses, and coat
checking all of which will be billed by the caterer. All the
charges are taxable. (Emphasis added)

Opinion
Petitioner’s activities as a wedding reception caterer fall within the purview of Section
1105(d)(i) of the Tax Law. See Matter of Hunts Point Palace, Inc., State Tax Commission, June 19,
1986, TSB-H-86(138)S. A caterer’s charges for catering prepared food and drink and any “other
charge” for the coordination of the event are subject to sales tax under Section 1105(d)(i) of the Tax
Law. See Hunts Point Palace, Inc., supra. See also Section 527.8(f) of the Sales and Use Tax
Regulations.
Petitioner’s charge for the use of its wedding ceremony room in connection with its catering
of the wedding reception falls within the scope of the term “other charge” specified in Section
1105(d)(i) of the Tax Law. Though in this case Petitioner’s facility comprises separate rooms,
Petitioner’s circumstances are no different than were it to have “rented” its banquet hall a half hour
earlier for an additional charge to accommodate the wedding ceremony prior to the reception. The
total charge in that case, including the rental of the facility for the wedding (ceremony and
reception), would be taxable. Moreover, Petitioner provides for both the use, albeit optional, of the
ceremony room and for the sale of food and drink to be consumed on Petitioner’s premises.
Therefore Petitioner’s catering service should be viewed in its entirety as opposed to separate
components. Accordingly, the charge for the rental of the ceremony room is an “other charge” to
Petitioner’s customer sold in conjunction with the sale of food and drink and thus is part of the
receipts subject to the sales tax imposed under Section 1105(d)(i) of the Tax Law.

DATED: May 8, 2003

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.