Must a tax-exempt nonprofit collect sales tax on items sold from a temporary table set up at its meetings?

Plain-English summary

The Richard Wagner Society of NY, Inc. is a 501(c)(3) nonprofit, exempt under Tax Law § 1116(a)(4). It sells hard-to-find books, records, and similar items about Richard Wagner — mostly by mail, but also from a temporary table set up at some of its meetings, which are held at various New York City locations (the Society has no permanent home beyond a P.O. box). It asked whether that temporary table is a "shop or store" whose sales it must tax.

The Department said no — the temporary table is not a shop or store, so the Society need not collect tax on those sales.

• Being exempt doesn't cover "shop or store" sales. A § 1116(a)(4) organization's exemption does not reach retail sales of tangible personal property made through a shop or store it operates (Tax Law § 1116(b)(1)). So the question is whether the table counts as one.
• What a "shop or store" is. Under 20 NYCRR § 529.7(i)(2), a "shop or store" is a place where goods are sold from display with regularity, frequency, and continuity — or any temporary shop/store located on the same premises as persons required to collect tax.
• Why this table isn't one. Because the Society meets at a different location each time, its occasional table lacks the regularity, frequency, and continuity the regulation requires. So it is not a shop or store, and the Society is not required to collect New York State and local sales tax on those receipts — as long as the table isn't on the same premises as someone required to collect tax.

What this means for you

A nonprofit's tax exemption has a "shop or store" hole. If your exempt organization runs a store, gift shop, or other regular sales operation, those retail sales are taxable and you must collect tax — the exemption doesn't shield them.

Occasional, roving sales are different. A table you set up now and then, at changing locations, is not a shop or store because it lacks regularity, frequency, and continuity. Sales from it aren't ones the exempt organization must tax.

Watch the "same premises" trap. Even an occasional table can become a taxable "temporary shop or store" if it sits on the same premises as someone required to collect tax (for example, at a commercial venue that itself collects sales tax). Placement matters — keep your occasional table clear of that situation.

Common questions

Q: We're a 501(c)(3). Aren't all our sales tax-exempt?
A: No. Your exemption does not cover retail sales made through a shop or store you operate (Tax Law § 1116(b)(1)). A regular sales operation is taxable even for an exempt organization.

Q: We only sell from a folding table at a few meetings a year, in different places. Do we collect tax?
A: Not on these facts. Because the location changes and the selling isn't regular, frequent, and continuous, the table isn't a "shop or store," so you need not collect tax — provided the table isn't on the same premises as a person required to collect tax.

Q: When would our occasional table become taxable?
A: If it takes on regularity, frequency, and continuity (a de facto store), or if it is located on the same premises as persons required to collect tax, it becomes a "shop or store" and the sales are taxable.

Citations and references

Statute and regulation:

• Tax Law § 1105(a) — imposes tax on receipts from every retail sale of tangible personal property
• Tax Law § 1116(a)(4) — exempts sales by (and to) organizations organized and operated exclusively for religious, charitable, scientific, literary, educational, and similar purposes
• Tax Law § 1116(b)(1) — nothing in the exemption exempts retail sales of tangible personal property by any shop or store operated by such an organization
• 20 NYCRR § 529.7(i)(2) — a "shop or store" includes any place where goods are sold from display with a degree of regularity, frequency, and continuity, as well as any temporary shop or store located on the same premises as persons required to collect tax

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1988.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a88_43s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-88 (43)S
Sales Tax
August 31, 1988

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S880712A

On July 12, 1988, a Petition for Advisory Opinion was received from the Richard Wagner
Society of NY, Inc., c/o William C. Miller, Miller, Blackeney and Divack, 108 East 38th Street,
Suite 1208, New York, New York 10016.
The issue raised is whether a temporary sales table constitutes a shop or store from which
sales would be subject to tax pursuant to section 1105(a) of the Tax Law.
Petitioner is an exempt organization as described in section 501(c)(3) of the Internal Revenue
Code and in section 1116(a)(4) of the Tax Law. Its activities consist of meetings for members of
Petitioner and other interested people during which knowledgeable lecturers and singers are heard.
The meetings have been held only in New York City. In addition, Petitioner offers for sale to its
members, and others, various books, records, etc. The items offered for sale substantially relate to
Richard Wagner, his life, and his music. Many of the items are difficult to obtain or cannot be
obtained from local retail sources. Sales are made primarily by mail. At some meetings, which are
held at various locations as Petitioner does not have a permanent location other than a post office
box, the items are offered for sale to those attending. At those meetings, a temporary table is used
to display the items offered for sale. New York State and local sales taxes have been collected on
sales made in or delivered to New York State locations.
Section 1105(a) imposes sales tax on "the receipts from every retail sale of tangible personal
property, except as otherwise provided in this article."
Section 1116(a) of the Tax Law states, in part, that:
Except as otherwise provided in this section, any sale or amusement charge by or to
any of the following or any use or occupancy by any of the following shall not be
subject to the sales and compensating use taxes imposed under this article: ... (4)
Any corporation, association, trust, or community chest, fund or foundation,
organized and operated exclusively for ... religious, charitable, scientific, testing for
public safety, literary or educational purposes ... .
Section 1116(b)(1) of the Tax Law states that "[n]othing in this section shall exempt retail
sales of tangible personal property by any shop or store operated by an organization described in
paragraph (4) ... of this section."
Sales and Use Tax Regulation 529.7(i)(2) provides that "[a] 'shop or store' ... includes any
place or establishment where goods are sold from display with a degree of regularity, frequency and
continuity as well as any place where sales are made through a temporary shop or store located on
the same premises as persons required to collect tax." 20 NYCRR 529.7(i)(2).
RODERICK G. W. CHU, COMMISSIONER
TP-8 (9/88)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-88 (43)S
Sales Tax
August 31, 1988

Petitioner holds meetings at various locations throughout New York City. Because Petitioner
has a different location for each of its meetings, a temporary table set up at some of these meetings
does not constitute a shop or store since it fails to occur with regularity, frequency and continuity
within the meaning and intent of section 529.7(i)(2) of the Sales and Use Tax Regulations.
Accordingly, Petitioner is not required to collect New York State and local sales taxes on
receipts from sales at its temporary sales table as long as the temporary sales table is not located on
the same premises as persons required to collect tax.

DATED: August 31, 1988

s/FRANK J. PUCCIA
Director
Technical Services Bureau

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