Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales And Use Tax Court Decisions

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Mission Pak Co. v. State Board of Equalization . . . (1972)

Classification of Glacéd Fruits as "Candy or Confectionery" Upheld

Under Revenue and Taxation Code Section 6359 as it was operative prior to January 1, 1972, "candy and confectionery" was excluded from the definition of "food products," the sale of which generally is not subject to tax. By regulation, the Board had defined "candy and confectionery" to include "candied fruits, crystallized fruits and glacé fruits [and] preparations of fruits . . . in combination with . . . sugar." Plaintiffs, taxpayer and its predecessor, were assessed tax resulting from the sale of their glacéd fruit products. Plaintiffs contended that the regulation was invalid, as inconsistent with Section 6359, or, alternatively, that their products were not properly classified as "candy or confectionery" but as "fruit and fruit products" or "sugar and sugar products," items which were specifically classed as "food products" by Section 6359.

The court of appeal observed that the construction of a statute by officials charged with its administration is entitled to great weight and if there appears to be some reasonable basis for the classification, a court will not substitute its judgment for that of the administrative body. The court held (1) that the Board's administrative ruling was reasonable and valid, since it was supported by the dictionary definition of "confectionery," the Legislature had frequently amended the statute without attempting to modify the administratively made definition of the phrase in question, and no one had previously challenged the Board's longstanding interpretation; and (2) that the evidence supported the classification of plaintiffs' products as "candy or confectionery" since after processing, approximately 80 percent of the product was sugar. Mission Pak Co. v. State Board of Equalization (1972) 23 Cal.App.3d 120.