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Revenue Administrative Bulletin 1989-63


Approved: October 4, 1989

RAB-89-63      The purpose of this Bulletin is to clarify the tax base used in determining the amount of sales tax due on food and beverages served at fundraising events.

Food and beverages served at fundraisers are sales of prepared food for immediate consumption and are subject to sales tax. [See MCL 205.52(1); 205.54(1)(a). See also Department of Treasury Sales and Use Tax Rule, 1979 AC, R 205.136(5), and Revenue Administrative Bulletin 1988-42.]

Note: If food is purchased from a caterer or other preparer and sales tax is paid on the purchase, then there is no further tax obligation on the food. The same tax treatment applies to alcoholic beverages where the charge for the beverage is included in the admission fee or donation and there is no further charge, such as a cash bar arrangement.

Sales by a nonprofit organization are not exempt simply because of the nonprofit status of the organization. Therefore, when food is provided by a nonprofit organization at an event where an admission fee is required or a donation is made, the food is subject to sales tax as provided in this Bulletin.

Determination of the Tax Base

The tax base is the fair market value of the food sold. Usually the fair market value is the price of admission or a donation to attend the fundraiser or to purchase and prepare the food. If the admission or a donation exceeds the fair market value of the food or drink, fair market value may be determined by any reasonable method. When food is provided by a caterer the sales tax is paid by the caterer, who may add the tax to the customer’s bill. [MCL 205.73] If the fundraising organization claims a sales tax exemption for resale on the caterer’s purchase, then the sales tax must be paid by the organization.

The sale of alcoholic beverages at a fundraiser is taxable. Sales tax is due on the total amount of the sales of beer, wine, and liquor. (See Department of Treasury Sales Tax Rule, 1979 AC, R 205.58.) If an organization pays sales tax on alcoholic beverages when purchased and provides the alcoholic beverages at the fundraiser at no additional charge to attendees, then no additional sales tax is owed. If at the fundraiser there is a charge for alcoholic beverages, sales tax is due on the total gross proceeds of the beverage sales, (and a credit may be taken for any sales tax paid when the organization purchased the alcoholic beverages.)

Prepackaged items (such as candy bars, potato chips, ice cream, popcorn, nuts or cans or bottles of soda) sold at various public events, facilities, and places including theaters, fairs, recreation centers, athletic events, facilities, or places, are taxable as prepared food for immediate consumption. [MCL 205.54(g)] For periods before January 1, 1990, the Department of Treasury will not assess tax on sales of these items if an organization did not charge or pay sales tax on these items.


  1. Tickets are sold to a political fundraiser for $25.00 per person. Meals provided at the fundraiser are purchased from a caterer at a charge to the organization of $10.00 per plate, and the organization did not claim a sales tax exemption for resale. The sales tax base for the food is the $10.00 per plate charged. The sales tax is paid by the caterer, who may add the tax to the bill or indicate on the bill, “Michigan State sales tax included.” The organization purchased beer and wine for the fundraiser and paid sales tax on their purchase. When the beer and wine are served at no additional charge to the attendees, no additional tax is due. If there is a “cash bar,” the sales tax is due on the total gross proceeds of the beverage sales.


  2. A church holds an “all-you-can-eat” pancake supper. Tickets are sold for $5.00 per person for adults, $2.75 per person for those under 12 years of age. Tax is due on the ticket price charged which approximates the fair market value of the food.


  3. A booster club sells hot dogs, bags of chips, candy bars, and cans of soda at a school athletic even. Tax is due on the total gross proceeds from the sales of these items.


  4. A nonprofit organization holds a fundraising fashion show where dessert and coffee will be served. Tickets are available for $15.00. Sales tax will be due on the fair market value of any food or drink served. The fair market value may be determined by quotations from caterers or another reasonable method.


  5. A boy scout troupe sells candy bars door-to-door. These sales are no food for immediate consumption and are not subject to ax as the candy bars are not sold at an event or public facility or place.


There are alternate methods for remitting tax on fundraiser sales:

  1. Groups currently holding a sales tax license may remit the tax on their current sales tax return.


  2. Groups that hold fundraising events repeatedly for specific months of the year may obtain a seasonal sales tax license from the Department and remit tax on their sales tax return.


  3. Groups conducting a one-time fundraising event may remit their sales tax on a concessionaire return (form C-5603a). These returns may be obtained by contacting the nearest Treasury District Office. (See pages 2 and 3 of this Bulletin for a list of these offices.)




State of Michigan Plaza Building

1200 6th Street

Detroit, MI 48226

(313) 256-2538



7 State Office Building

305 Ludington Street

Escanaba, MI 49829

(906) 786-6334



State Office Building, 7th Floor

125 E. Union Street

Flint, MI 48502

(313) 768-2782


Grand Rapids

State Office Building,

350 Ottawa Street, NW

Grand Rapids, MI 49503

(616) 456-5334



West Main Mall Business and Professional Plaza

Suite A – 200

Kalamazoo, MI 49009

(616) 382-2830


Treasury Building

430 W Allegan Street

Lansing, MI 48922

(517) 335-1322


Medical-Dental Center, Room 19

1414 W. Fair

Marquette, MI 49855-2655

(906) 226-6717

Mt. Clemens

64 New Street

Mt. Clemens, MI 48043

(313) 469-1310


100 N. Saginaw Street

Pontiac, MI 48043

(313) 335-6102


State Office Building

411-I E. Genesee Street

Saginaw, MI 48605

(517) 771-1780

Sault Ste. Marie*

1126 E. Easterday Avenue

Sault Ste. Marie, MI 49783

(906) 632-2183

* Mondays only

Traverse City

701 S. Elmwood Avenue

P.O. Box 969

Traverse City, MI 49685

(616) 946-5630