On certification to the Superior Court, Appellate Division, whose opinion is reported at 328 N.J. Super. 467 (2000).
The opinion of the court was delivered by: Per Curiam
ON CERTIFICATION TO Appellate Division, Superior Court
Chief Justice Poritz PRESIDING
We affirm the judgment of the Appellate Division substantially for the reasons set forth in Judge Braithwaite's comprehensive and well-reasoned opinion. GNOC Corp. t/a The Grand v. Director, Div. of Taxation, 328 N.J. Super. 467 (App. Div. 2000). We write separately only to elaborate on the analytical basis for our conclusion that GNOC was liable for sales taxes on the alcoholic beverages it purchased from wholesalers under sale-for-resale certificates and then provided to patrons on a complimentary basis.
In support of that conclusion, we rely, as does the Director of the Division of Taxation, on N.J.S.A. 54:32B-2(e), which defines "retail sales," in pertinent part, as follows:
(1) A sale of tangible personal property to any person for any purpose, other than (A) for resale either as such or as converted into or as a component part of a product produced for sale by the purchaser . . . .
Because we agree with the Appellate Division's determination that the complimentary provision of alcoholic beverages to casino patrons "?is a transfer for no consideration, or at least for legally insufficient consideration, and does not constitute a "resale" of the beverages,'" GNOC, supra, 328 N.J. Super. at 480 (quoting Boardwalk Regency v. Director of Taxation, 17 N.J. Tax, 331, 342-43 (1998)), then to the extent that GNOC purchased alcoholic beverages from wholesalers to be provided on a complimentary basis to casino patrons, that transaction constituted a retail sale and not a sale for resale under section 2(e) of the Sales and Use Tax Act, and was thereby subject to sales tax pursuant to section 3 of that Act.
GNOC's response, however, is that even assuming without conceding that the sale by wholesalers to casinos of alcoholic beverages to be provided without cost to patrons is not a sale for resale, that transaction nevertheless is exempt from sales tax pursuant to N.J.S.A. 54:32B-8.2, which provides in part as follows:
Receipts from the following are exempt from the tax imposed under the Sales and Use Tax Act: sales of food, food products, beverages, dietary foods and health supplements, sold for human consumption off the premises where sold.
GNOC contends that sales to it by wholesalers, if not for resale, constitute "sales of . . . beverages . . . for human consumption off the premises where sold" and accordingly are exempt from the sales tax. We reject GNOC's contention, but our explanation of that rejection is necessarily complex.
Prior to the enactment in July 1980 of a statute that exempted from the sales tax "all sales at retail of alcoholic beverages," see N.J.S.A. 54:32B-8.34, and during the period when retail sales of alcoholic beverages were subject to sales tax pursuant to N.J.S.A. 54:32B-3, section 8.2, on which GNOC relies, excluded alcoholic beverages from the food products that were exempted from the sales and use tax. That exclusion, which originally was enacted in 1960, read in part as follows: "Receipts from the following are exempt from the tax imposed under the Sales and Use Tax Act: sales of food, food products, beverages except alcoholic beverages . . . dietary foods and health supplements, sold for human consumption off the premises when sold. . . ." L. 1960, c. 30 (emphasis added).
Effective July 1, 1980, the Legislature enacted N.J.S.A. 54:32B-8.34, L. 1980, c. 107, which exempted sales at retail of alcoholic beverages from the sales and use tax. Simultaneously, the Legislature deleted the exclusion for alcoholic beverages from the food products exempted from the sales and use tax pursuant to N.J.S.A. 54:32B-8.2. L. 1980, c. 107. At the same time, L. 1980, c. 62, the Alcoholic Beverage Wholesale Sales Tax Act was enacted, which imposed a tax on "the receipts from every sale of alcoholic beverages . . . by any wholesaler to any retail licensee." N.J.S.A. 54:32C-3. Those enactments had the ...