Sale of Food at Bingo

Hello, New to site. Florida HOA. I have a Q on the subject of selling food and drink at a Bingo game held in our community. The HOA President & Treasurer wants to join the 2 functions under one banner to avoid taxation. Is this legal? Welcome your input.

Melissa, I think you misunderstand the OP.

He is not suggesting using HOA funds to buy food to give to bingo players. They want to sell food at the bingo game. Presumably they would buy the food to sell, but also presumably they intend to make a profit.

OP, I admit I’m still not entirely clear as to what is happening. Can you give us more details about the event?

Thanks for the responses! Bingo is stated to separate from the HOA (Not For Profit) but has a appointed Chairperson running it and Bingo supposedly funds itself except that a weekly payment is made to the HOA to purchase Bingo supplies. They now want to combine food sales into it and have the HOA fund it also. My contention to them is that they are actually running the game and now selling food for profit and if the combine the two they are looking at trouble with taxes that as a 501(C) say they don't have to pay. Never mind the last Chair was skimming (whole other story)

Tax avoidance is legal. Tax evasion is illegal.

Will

I am still confused. A few questions:

1. Is the HOA (via committee or not) running the Bingo games?

2. Is the HOA receiving a profit from the Bingo games?

3. Is there presently food and beverage being served during Bingo?

4. Who is running the food and beverage service?

5. Is the HOA receiving a profit from the food and beverage operation?

Thanks

I don't know how combining Bingo with any other activity will affect your tax status. I think your association should run the Bingo games so that you will be under the auspices of Chapter 849.0931 which makes Bingo legal in HOAs, condos, co-ops, mobile home communities, etc. Under FS 849 you have to pay out all of the money that people pay to play AFTER deducting expenses to run the game (cards, markers, etc.). Any money leftover should then be donated BY THE ASSOCIATION to a charitable, nonprofit, or veterans’ organization which is exempt from federal income tax.

Note that for the association to donate the leftover money (ideally there shouldn't be any) the money would have to belong to the association in the first place. Ergo, the association should run the bingo games.

If you're NOT operating under FS 849 then you're probably in violation of the state's gambling statute.

FS 849 requirements contains language regarding net proceeds, prizes, and business expenses for running the games. Non-bingo related items are not deductible and while you'd need to ask a lawyer to be sure, I don't think food and drink qualifies as a "bingo business expense". The statute seems pretty clear on that.

I'd not have any vending of food and drink anywhere near my FS 849 bingo games, at least not to the point where the comingling of funds might take place. If you choose to do so then that activity would probably subject you to some form of tax liability. Trying to evade that liability by hiding it under your bingo operation is probably a very bad idea.