(582 P.2d 1068)
No. 77-897Colorado Court of Appeals.
Decided May 11, 1978. Rehearing denied June 8, 1978. Certiorari denied August 21, 1978.
Trial court affirmed department of revenue determination that Elks lodge was required to collect sales tax on the amount paid for meals served at the lodge, and lodge appealed.
Reversed
1. TAXATION — Elks Lodge — Non-Commercial — Non-Profit — Incidental Food Service — Closed to Non-Elks — Not a “Club” — Sales Tax Statute — Inapplicable. Where the evidence established that Elks Lodge was non-commercial and non-profit, that food service was incidental to its primary activities, and that, except for rare occasions, the lodge was closed to non-Elks, the lodge was not a “club” for sales tax purposes; consequently, the sales tax statute did not apply, and the lodge was not required to collect sales tax on the amount paid for meals served there.
Appeal from the District Court of Larimer County, Honorable Dean Johnson, Judge.
March, March, Myatt Korb, Mark L. Korb, for plaintiff-appellant.
J. D. MacFarlane, Attorney General, David W. Robbins, Deputy Attorney General, Edward G. Donovan, Solicitor General, Chris J. Eliopulos, Special Assistant Attorney General, for defendant-appellee.
Division II.
Opinion by JUDGE VAN CISE.
The executive director of the department of revenue (the department) determined that Fort Collins B.P.O.E. Lodge No. 804 (the lodge) was required to collect sales tax on the amount paid for meals served at the
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lodge, and was liable for a $3,475.10 deficiency plus penalty and interest for the period April 1, 1972, through March 31, 1975. After a trial de novo in the district court pursuant to § 39-21-105, C.R.S. 1973, the department’s determination was affirmed. The lodge appeals, and we reverse.
The evidence is undisputed. At all times pertinent hereto, the lodge was a private unincorporated organization with 1350 to 1400 dues-paying members, organized for fraternal, charitable, educational and benevolent purposes and not for pecuniary gain. It was one of more than 2,000 subordinate lodges whose parent or grand lodge is a national organization identified as the Benevolent and Protective Order of Elks of the United States. The lodge owned a three-story brick building with a reading lounge, offices, lodge room, dining room, handball courts, bowling alleys, steam baths, and other recreational facilities. The lodge activities included promotion of common objects and holding of periodic meetings. As a charitable organization, it was exempt from federal income and local property taxes.
The lodge was a “closed lodge,” not open to the general public but only to its own members or to persons who were members of other Elks lodges. Guests of members, even spouses or other relatives of members, were not admitted except on rare special occasions such as youth day, flag day, or for a New Year’s party.
The food service operation was incidental to its other activities. Food was prepared and served, without consideration of profit, for the convenience of, and was paid for by, the lodge members who consumed it. No sales taxes were collected by the lodge or paid over to the department.
The issue on this appeal is whether the sale of meals by the lodge is taxable under the sales tax act. That act provides in § 39-26-104(1)(e), C.R.S. 1973, that: “There is levied and there shall be collected and paid a tax . . . [u]pon the amount paid for all meals and cover charges, if any, furnished in any restaurant, eating house, hotel, drug store, club, resort or other such place at which meals or food are regularly sold to the public. . . .” (emphasis added)
Colorado College v. Heckers, 33 Colo. App. 219, 517 P.2d 419 (1973), is dispositive of the present case. There the department contended that food sold in college snack bars and student unions, where there was no limitation placed on public access thereto, was subject to the same subsection of the sales tax act. However, this court held that the question was whether the facility served food or meals to the public “on a regular basis,” and that “the word ‘regular’ suggests continuity and consistency of occurrence and excludes the idea of incidental, occasional or casual sales to the public.” It then held that: “Absent any showing that members of the public regularly purchase food or meals at plaintiffs’ facilities, plaintiffs’ operations are not subject to a sales tax.”
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[1] Contrary to the department’s contention that the word “club” in the statute rendered food sales by the lodge subject to sales tax, the court i Heckers stated that “the nature of the various facilities enumerated in the statute suggests a legislative intent to impose a tax upon meals or food sold by public-oriented commercial establishments.” Here the evidence established that the lodge was non-commercial and non-profit, and that food service was incidental to its primary activities, and that, except for rare occasions, the lodge was closed to non-Elks. Even if it were a “club” under the common definition of that word, the lodge was not a “club” for sales tax purposes. Hence, under the facts of this case, the sales tax statute does not apply.
Judgment reversed.
CHIEF JUDGE SILVERSTEIN and JUDGE ENOCH concur.