Could a Catholic hospital use its religious-organization sales-tax exemption to buy liquor for medical staff meetings?

Plain-English summary

The hospital qualified for sales-tax exemption as a religious organization because it was part of the Catholic Church.

Section 151.310(a) exempted taxable items sold, leased, or rented to the religious organization itself, not to individuals within it. The hospital could buy items tax-free only when they related to its exempt purpose.

Liquor for medical staff meetings did not meet that purpose-related test and was not exempt.

Common questions

Was the hospital an exempt religious organization? Yes.

Did that exempt every hospital purchase? No.

Was liquor for staff meetings exempt? No.

Citations and references

• Tex. Tax Code § 151.310(a) — religious-organization purchases.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8605L0736C10

Original ruling text

May 6, 1986

Dear ***:

Thank you for your letter of April 25, 1986 concerning the purchase of
liquor for medical staff meetings.

HOSPITAL A qualifies for sales tax exemption as a religious organization
since it is a part of the Catholic Church.

Section 151.310(a) of the Sales Tax Statute provides that a taxable item
sold, leased, or rented to a religious organization is exempt. The exemption
is for the organization itself, not the individuals within the organization.

The hospital may purchase taxable items tax free if those items are
related to the exempt purpose of the organization. However, the purchase
of Liquor for staff meetings does not qualify for exemption.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division