Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018
 

Sales and Use Tax Annotations


A    B    C    D    E    F    G    H    I    J    L    M    N    O    P    R    S    T    U    V    W    X   

F

245.0000 FOOD PRODUCTS—Regulation 1602

245.0000 FOOD PRODUCTS—Regulation 1602

See also Taxable Sales of Food Products; Vending Machine Operators; Reporting Methods for Grocers.

(a) IN GENERAL

245.0020 Albumin sold by a drug company to a hospital to be used as a culture medium to grow bacteria and other microscopic organisms for research is not an exempt food product for human consumption. 4/24/62.

245.0037 Aspertame. Aspertame is the chemical compound which composes such sugar substitutes as "Nutrasweet" and "Equal." Sugar substitutes consisting of Aspertame qualify as "food products." 5/31/91.

245.0060 Baby Formulas. Baby formulas sold in bottles with attached nipples, collars and discs, constitute sales of exempt food products in nonreturnable containers. Gross receipts from such sales are not taxable. 12/9/63.

245.0080 Baby Formulas in Disposable Formula Bottles. The sale of baby formulas in disposable formula bottles containing pre-sterilized disposable nipple units is an exempt sale. 3/29/65.

245.0089 Beer Ingredients. The sale of yeast and Irish moss to customers who will brew their own beer qualify as sales of food products if the yeast is not sold as a dietary supplement and the Irish moss is not sold for medical or another nonedible purpose. The fact that the finished product, home brewed beer, results in a product that is not considered a food product for sales tax purposes does not alter the fact that these ingredients, in their packaged form as sold, constitute food products sold for human consumption. 8/10/95.

245.0140 Sodium Bisulfite. Sodium Bisulfite used on potatoes to preserve their whiteness is not a food product, and its sale to consumers, for example, by grocery stores, is subject to tax. However, where it is purchased by restaurants for fixing peeled potatoes so as to retard discoloration, it may properly be purchased ex-tax for resale since the compound becomes incorporated into the potatoes. 12/20/60. (Am. 2000–1).

245.0150 Brewing Aid. "Spring Water Mineral Brew Golden Cup Coffee Saver", a brewing aid, does not qualify as a food product under section 6359 of the Revenue and Taxation Code. It is not a coffee extender or blend or any other coffee substitute. It is, rather, a brewing aid whose primary function is to extract all the flavor without adding any other flavors. It is mixed with grounds prior to brewing so that only half of the normal amount of coffee is used to brew a full pot. Most of the Coffee Saver stays in the grounds and is thrown away with them. 6/6/91.


Back to top

245.0190 Cake Decoration—Silver Balls. Candy-coated cake decorations called "silver balls" are edible and qualify as "food products" within section 6359. Sales of "silver balls" for human consumption are nontaxable. 6/9/82.

245.0205 Calcium Propionate and Epodium Propionate. Neither calcium propionate nor sodium propionate are food products, although they do become a component part of bread which is a food product. The food product exemption is based on the nature of the property at the time it is sold. Accordingly, while sales of these products to bakeries which resell the bread are exempt as sales for resale, sales to customers such as a governmental agency which bakes bread for its own use are subject to tax. 5/24/55.

245.0280 Carbonated Beverage Resembling Champagne. A nonalcoholic carbonated beverage prepared and sold to resemble champagne is not a food product within the meaning of section 6359. 6/22/65.

245.0285 Carbonated Fruit Juices. Carbonated products which are considered 100% natural fruit juices qualify as exempt "food products". If the carbonated product includes a preservative, such as sodium benzoate, or any other additive, it will not be considered a natural fruit juice and tax will apply to its sale. 3/5/87.


Back to top

245.0287 Carbonated Fruit Juices—Other Additives. Under Sales and Use Tax Annotation 245.0285 (3/5/87), carbonated fruit juices are considered "food products" if they contain 100% natural fruit juice. However the annotation points out that if the carbonated product includes a preservative, such as sodium benzoate, or any other additive, it will not be considered a natural fruit juice and tax will apply to its sale.

An exception to that statement occurs when a substance that naturally occurs in fruit juices is added to the juice. For example, the addition of citric acid and/or ascorbic acid (Vitamin C) to carbonated 100% fruit juices in which Vitamin C already occurs will not cause the juice to be excluded from food products under Regulation 1602(a)(2). 10/28/03. (2004–2).

245.0290 Chemicals Used in Experimental Diet. Mixtures of amino acids, vitamins and minerals are combined with fruit-flavored liquids and used as an experimental diet for human beings. Inasmuch as these combinations are basic elements of normal food for human consumption and are intended to be substituted therefor, they qualify as food products under section 6359 7/21/67.

245.0315 Combination Package—Flower Pot Bread Baking Kits. These "Baking Kits" are composed of a six-inch clay pot with a package of bread mix inside the pot. The clay pots are covered with decorative wrapping and imprinted paper. The clay pot represents 20 percent of the total cost of the product.

Since the cost of the clay pot represents 20 percent of the total cost of the baking kit, it is expected that the retail value of the clay pot represents more than 10 percent of the retail value of the baking kit, exclusive of the container. Therefore, a segregation must be made and the sales tax is measured by the retail sales price of the clay pot. (Regulation 1602(b).) 11/14/95.

245.0320 Communion Wafers. Communion wafers are food items the sale of which is exempt. 8/5/66.

245.0330 Cooking Wine. Cooking wine, which is rendered unfit for beverage use within the meaning of section 5362 of the Internal Revenue Code and therefore may be used only for cooking, qualifies as a food product. 9/21/94.


Back to top

245.0340 Curing Salt. Curing salt sold to butchers for curing meat is permanently incorporated into the meat and such sales are exempt both as sales of a food product and as sales for resale. In the curing process, it is assumed that a fairly large amount of the curing salt does not become permanently incorporated into the meat but is lost or discarded. Nevertheless, this is not important. The critical factor is whether this product is purchased for the purpose of being incorporated into the meat. If this is the purpose, it is not significant that the process used entails a large amount of waste. 10/6/55.

245.0370 Distilled Water. When the label on a bottle of distilled water does not include a reference to intended use or indicates the water is only for non-food purposes, the distilled water should not be regarded as sold for human consumption and its sale is thus subject to tax.

When the label indicates that the distilled water is for drinking only or includes references to both food and non-food uses, the sale of that bottle of distilled water qualifies for exemption from tax under section 6359. 12/01/00. (2001–3).

245.0380 Drug Stores, selling food products, cannot adopt percentage of purchases method of computing tax. 11/8/50.

245.0395 Essential Oils. These are products such as oil of clove, oil of fir, oil of lemon, etc. These oils are sold in one ounce bottles with no dropper. The labels contain no statement as to use. It is understood that "essential oils" sold in one ounce bottles are generally used as scents and not meant to be ingested. As such, the essential oils are not food products and their sales are subject to tax. 8/23/89.


Back to top

245.0400 Fish Bait. Sales of mudsuckers used as bait are subject to sales tax since bait is not an exempt food product. 8/24/64.

245.0420 Fish Bait—Nonliving. Although sales of sardines for human consumption are exempt, sales of "nonliving" fish or animal products for use strictly as fish bait and not intended for human consumption do not fall within section 6358(a) and hence are subject to sales tax. (For treatment of live fish bait refer to Annotation 110.0150.) 6/15/60.

245.0450 Flavored Mineral Waters. Flavored, noncarbonated mineral waters which make no medicinal claims are exempt food products. 1/27/95.

245.0480 Gatorade. Gatorade, a noncarbonated soft drink, is an exempt food product on and after January 1, 1970, pursuant to section 6359 as amended 9/19/69.


Back to top

245.0485 Goetz Pale "Near Beer." The product label indicates that the product is "nontaxable under section 5051 I.R.C." and that the product is brewed with grain, malt, hops, yeast and water.

The statement "nontaxable under section 5051 I.R.C" merely indicates that Goetz Pale "Near Beer" is not federally taxed as an alcoholic beverage. According to the Department of Alcoholic Beverage Control (ABC), this product is not registered in California as an alcoholic beverage. The alcohol content of the product is below that necessary to be legally defined as an alcoholic beverage for ABC purposes.

However, from the ingredients and name, the product does contain some alcohol and that it is naturally carbonated. Even though the alcohol content is below that required under ABC rules for an alcoholic beverage, this product is a spirituous, malt liquor to the same extent as hard apple cider which is not exempt as a spirituous liquor. Additionally, it is assumed that this product is carbonated and thus taxable. 4/29/75.

245.0492 Hains Linseed Oil. Linseed oil is extracted from flaxseed and may also be referred to as flaxseed oil. Hains linseed oil is an edible oil from vegetable origin which, when sold for human consumption, qualifies as a food product. It follows that the sale of Hains linseed oil is not taxable. 8/25/88.

245.0495 Herbal Chew. An herbal chew that is not made of gum is not a food product or chewing gum even though it contains no tobacco. Accordingly, its sales are subject to tax. 10/19/94.

245.0496 Herbal Extracts. These are plant extracts that have been cold processed in a mixture of alcohol and water. They are sold in a one-ounce bottle with a dropper. The label states "for use as a beverage."

The herbal extracts as described are exempt food products they are sold as a beverage and the label or packaging makes no claim to the product's dietary benefits. 8/23/89. (Am. 2010-1).


Back to top

245.0498 Herb Capsules. Nature's Sunshine Herb products are sold in capsule form. They are an herbal food combination containing such items as kelp plant, dandelion root and alfalfa herb.

Since the label does not state that the product is to be used as a dietary supplement or adjunct, these products qualify as food products the sale of which is exempt from tax. 2/5/92. (Am. 2010-1).

245.0499 Herbal/Food Combination. Under California law, no particular claims for nutritive value are required for an item to be considered a food for human consumption. Herbal products, the labels of which do not designate the product as a food supplement or adjuncts, are food products. Thus, the sale of such products is exempt from sales and use taxes. 1/31/94. (Am. 2010-1).

245.0520 Horse Meat Products. Horse meat and horse meat products are ordinarily not regarded as food products for human consumption, being primarily purchased as food for animal consumption.

In order to be exempt, sales of such products must be supported by evidence that the property was in fact purchased for human consumption.

The fact that such products are inspected and suitable for human consumption is not sufficient proof for exemption. They must actually be used for human consumption. 11/25/53.

245.0580 "Icee." "Icee" is a carbonated beverage, in a slightly different form for serving, and is subject to tax. While the CO2 contributes to the freezing process, it is also an essential part of the beverage itself. 3/24/70.


Back to top

245.0590 Ice Sold to Street Food Vendors. A taxpayer rents hot dog carts to independent street vendors and also sells them ice without taking any resale certificates. The street vendors use some of the ice to keep their food products cool or fresh and some of the ice is resold in or with soft drinks. In lieu of clear evidence otherwise, the Board will regard 50 percent of the sales of the ice to be nontaxable sales for resale with the soft drinks and 50 percent as taxable sales of ice used in the vendor's business. The exemption provided by section 6359.7 does not apply to these taxable sales since that exemption applies only with respect to ice used in packing and shipping food products for human consumption by a carrier and not the use of the ice by street vendors. 6/19/95.

245.0620 Imitation Lime and Lemon Juices. Imitation lime and lemon juices are exempt. 5/13/64.

245.0640 Knox Gelatin Drink. Knox Gelatine Drink is an exempt food product, effective January 1, 1970. 3/24/70.

245.0652 Liqueur-Filled Candy. While chocolates filled with liqueurs meet the definition of candy and confectionery pursuant to Sales and Use Tax Law section 6359, they do not necessarily qualify for exemption as "food products." When these chocolates are sold with a label stating the sale to a person under age 21 is unlawful because the product contains sufficient amounts of alcohol, the products are taxable. "Spirituous, malt and vinous liquors" are specifically excluded from the term "food products." 1/5/90.

245.0660 Liquid or Dry Tea. Liquid or dry tea in half-pint containers with minimal additives is tax exempt. 8/25/67.


Back to top

245.0680 "Liquid Smoke." Liquid smoke is considered to be sold for resale to a restaurant or other customer who applies the liquid smoke as an ingredient of barbecued meats which are to be sold. The theory is that the smoke or certain ingredients contained in it become physically incorporated into the food providing flavor to it. 8/24/64. (Am. 2005–2).

245.0698 Malt Extracts. Dry and liquid malt extracts are food products even when sold by retailers of beer making supplies for the purpose of making beer or other carbonated and/or other alcoholic malt beverages. 5/8/91.

245.0700 Malt Syrup. Malt syrup, often sold as a substitute for molasses for the purposes of being an ingredient of, or upon, food products would be exempt. 6/22/53 (revised 1/1/70).

245.0710 Manufacturer's Coupons Redeemed with Food Stamps and Cash. When a retailer receives cash, manufacturer's coupons, and food stamps for a taxable sale, the amounts paid in cash as well as the amounts paid in manufacturer's coupons are subject to sales tax. USDA regulations are consistent with this application of tax.

When a person purchases mixed merchandise, some generally taxable and some exempt, and pays for it with food stamps and cash, the amount of the food stamps must be applied first to merchandise normally subject to sales tax. 11/1/91; 11/12/91.


Back to top

245.0724 Medicinal Claims. The Sales and Use Tax Law provides an exemption from sales and use taxes for sales of food products for human consumption under certain circumstances. "Food products" do not include medicines and preparations in liquid, powdered, granular, tablet, capsule, lozenge, and pill form sold as dietary supplement or adjuncts. A product is either a food, medicine, or a supplement or adjunct; these classifications are mutually exclusive. For purposes of this exemption, "medicine" has the same meaning as defined in Regulation 1591. A product that does not meet the definition of a medicine in Regulation 1591 is not a medicine for purposes of this exemption Regulation 1602. A product cannot be classified as a medicine solely on the basis of medicinal claims on the product's label or in its brochures.

Except where taxable for all uses as provided in subdivision (c) of Regulation 1591, when determining if a product is a medicine, it must first be determined if the product is approved for use by the U.S. Food and Drug Administration to diagnose, cure, mitigate, treat or prevent any disease, illness or medical condition. If a product is so approved, it is a medicine under Regulation 1591, subdivision (a)(9)(A) and is not a food product.

To determine whether a product qualifies as a medicine under Regulation 1591, subdivision (a)(9)(B), we look to whether it is "commonly recognized" as a substance or preparation for use in the mitigation, treatment, or prevention of disease. "Commonly recognized" as a medicine means general acceptance indicated by either: (1) the greater weight of opinion in the medical community, as reflected, for example, by refereed medical journals or similarly authoritative scientific publications or pronouncements from authoritative regulatory institutions; or (2) constitutional, statutory, or controlling case law authorities establishing that the substance or preparation in question is a medicine as a matter of law. (11/17/08).

245.0732 Medicines—Medical Foods. Products known as "medical foods," as defined under Section 5(b) of the federal Orphan Drug Act, are medicines pursuant to Section 6369. The sale of "medical foods" would not qualify for the Section 6359 exemption for food products because medicines are specifically excluded from the definition of a food product. Therefore, tax generally applies to retail sales of "medical foods," including over-the-counter sales. However, "medical foods" that are sold or furnished in an exempt manner as specified in Regulation 1591, subdivision (d)(1)-(6), are not subject to tax. 10/21/09.

245.0740 Monoglycerides. The sale of monoglycerides for use as an ingredient or component part of a manufactured food product is exempt as a sale for resale purposes. 8/31/55.


Back to top

245.0760 Mono-Sodium-Glutamate. Mono-Sodium-Glutamate is a taste intensifier added to food to enable the user to perceive the flavor to a greater degree than possible without it. In itself it has no flavor. It is marketed under several trade names, one of which is "Accent."

Mono-Sodium-Glutamate is a food product for human consumption within the meaning of the Sales and Use Tax Law. Accordingly, sales of Mono-Sodium-Glutamate are exempt from sales tax. 5/14/52.

245.0765 Muesli, Pasta, Chili, and Soups. These products are usually described as dehydrated cereal, pasta, stew, and soups. Although they probably contain a high proportion of powder, these items represent products traditionally accepted as foods. Therefore, despite the fact that these items are designed to decrease caloric intake, their sales are exempt from tax. 9/16/91.

245.0770 Mycoban. Mycoban, a preservative added to bread to inhibit the formation of mold, is not a food product. Accordingly, sales of Mycoban are subject to sales tax. 5/14/52.

245.0840 Pan Oils. Tax does not apply to sales of oils with a vegetable oil or lard base where these oils are ultimately consumed by humans as an ingredient of bread or other bakery products. These products fall within the definition of food products for human consumption set forth in section 6359 of the Sales and Use

Tax Law and are ultimately consumed by humans as an ingredient of the bread or other bakery products. On the other hand, the tax applies with respect to the sale of mineral oil or oil with a mineral oil base used for greasing pans or as divider oil, even though it may find its way into the bakery products. The product is not within the definition of food products for human consumption and is definitely purchased for some reason other than resale.

Mixtures containing beeswax, mineral oil, or other ingredients not within the definition of food products cannot be regarded as food products for human consumption for purposes of the sales tax. Therefore, the sale of these mixtures for use as pan grease, divider oil, and the like, are taxable retail sales. 3/24/52.


Back to top

245.0860 Pan Oils. If a pan oil is essentially an edible oil of animal or vegetable origin, it is considered exempt. If, however, the oil has a substantial amount of mineral oil or other ingredient not within the definition of "food products," the sale thereof is subject to tax. 5/14/53.

245.0900 Petroleum and Mineral Oil, tax applies to sale to bakeries for use in lubricating dough cutters and troughs although a portion of such lubricants is picked up by and becomes an ingredient of the bakery products. 6/23/50.

245.0920 Peanuts, dried salmon, pretzels and beef jerky are considered exempt food products. If, however, retailer provides any facilities for the consumption of such products their sale would be taxable. deletion 3/11/54. (AM 2017).

245.0940 Hypo-Allergenic Baby Formula. ProSobee, an infant formula made from soybeans containing no vegetable galactogens and Isomil, a milk-free, soy, infant formula, are exempt food products under section 6359 of the Revenue and Taxation Code. 12/14/65.


Back to top

245.0980 Salted Wine. Salted wine sold for use in cooking, is "rendered unfit for beverage use" under section 5362(d) of the Internal Revenue Code and is not "fit for beverage purposes" under section 23004 of the Business and Professions Code. It is, therefore, not a "vinous liquor" under section 6359 of the Revenue and Taxation Code and, accordingly, qualifies as an exempt food product. 2/8/68.

245.1020 Semifrozen Beverage Products. Semifrozen beverage products marketed variously as "frozen slush," "fruit slush," "Slurpee," "Blizzard," etc., are subject to tax if they are carbonated and are exempt if noncarbonated. They are not snow-cones. 3/12/70.

245.1040 Sherbet. In order to label a item as sherbet a manufacturer must incorporate in it milk or milk products and as such it is exempt. 5/9/61.

245.1060 Soyamel. Soyamel, as an independent food item, used as part of a regular diet or as a substitute for dairy milk for health reasons, qualifies as an exempt food product. 4/14/69.

245.1063 Soy Drinks. The following three soy based drinks—Vitasoy Vanilla Delite Natural Soy Drink, SoyMoo Non-Dairy Soy Drink, and Edensoy Natural Soy Beverage—qualify as food products the sales of which are exempt from tax. 1/31/92.

245.1066 Sports Drinks. Noncarbonated sports drinks such as Gatorade, Powerburst, Exceed, etc., qualify as food products the sales of which are exempt from tax under Regulation 1602(a)(1). 2/26/97.


Back to top

245.1067 Sports Energy Drinks. Sales of sports energy drinks, as a product category, are nontaxable without regard to wording such as "carbohydrate" or "energy," which may appear on their label. The products are little more than sugar and water and not supplemental or adjunct items to remedy gross dietary deficiencies or gross mineral depletion. These products are marketed as responsive to transitory nutritional depletion resulting from strenuous exercise. These products are nothing more than beverages. A sale of a product from this entire product category is nontaxable as a food product, without regard to insubstantial difference between products. 5/29/96.

245.1075 Stretch Island Fruit Leather. Stretch Island Fruit Leather is a compressed, dried natural fruit product consisting of fruit, fruit juices, and spices. It does not contain sugar, preservatives, artificial flavors or colors. It is not a "snack food," it is a nontaxable food product. 9/6/91.

245.1080 Survival Kits. Where such kits contain food products as well as other items that are taxable and the kit is sold for a lump sum, an allocation between the taxable and non-taxable items must be made. 11/31/61.

245.1093 Thickened Juices. These products are described as specially formulated to assist health care operators with the dietary management of residents with dysphagia. The smooth consistency ensures a safe swallow. These products also come in pre-packaged containers that do not require refrigeration until opened for serving. They come in 46-ounce bulk packages and 4-ounce individual sealed cups. The pictures of the products indicate that they contain 100 percent fruit juice, and the flyers state that the juices provide 100 percent of the minimum daily RDA of Vitamin C.

Though the products are given to persons with a medical problem, they are given to deal with the patients' nutritional needs. Foods and medicines are mutually exclusive categories with different requirements for exemption from tax. (Regulation 1602(a)(4).) For that reason, we apply the rules regarding the taxation of food products rather than the sales of medicines to the sales of these products. Thus, under the criteria set forth in Regulation 1602(a)(2) and (a)(5), the thickened juices and beverages qualify as food products, the sale of which is not subject to tax. 1/21/05. (2006–1).


Back to top

245.1095 Toppkrisp Nutritional High Fiber Meal Replacement. From the brochure's reference to convenience and the fact that Toppkrisp Nutritional High Fiber Meal Replacement apparently does not need to be mixed with anything, it is assumed the product is similar to a wafer, cracker, or cookie. This product qualifies as a "food product" the sales of which are exempt from tax since it is not sold in a form described in section 6359 (c).

deletion. 5/9/91. (AM 2017).

245.1098 Waxpacks—Gum and Cards. Waxpacks are combination packages generally consisting of one stick of gum and various quantities of baseball cards. Sales of waxpacks are taxable. 9/26/89.

245.1100 Wine Flavoring Extract. "Wine Chef," an alcohol-free instant wine flavoring added to food after cooking is a flavoring extract and an exempt food product. 10/21/69.

245.1102 Yeast. Yeast purchased by both beer and winemakers are both food products and are used for similar purposes. Beer brewers and winemakers select specific strains of yeast for the flavor, aroma, and alcohol content that the yeast contributes to the end product. Therefore, sales of viable yeast that is sold as food for human consumption in the production of beer, mead, ale, and wine are not subject to tax under Regulation 1602. (1/19/16)


Back to top

(b) DIETARY SUPPLEMENTS AND ADJUNCTS

245.1110 Advanced Formula Fat Burners, Fat Burners. These are tablets and capsules designed to help develop lean muscle tissue while losing unwanted and harmful body fat. These products are dietary supplements, the sales of which are taxable. 12/20/93.

245.1119 Aloe Vera Gel. Aloe vera gel consists of 99.55% aloe vera, .25% Irish Moss, and .20% sorbic acid (a food preservative). It is not labeled as a dietary supplement and is consumed as a beverage. Under these conditions it qualifies as an exempt food product under Regulation 1602. 8/21/89.


Back to top

245.1121 Amino Acids Pure Muscle Building Formuto, Amino 1000. This product is in capsule form and described as a "nutritional supplement" designed to provide amino acids in order to maintain a proper level of protein for heavy exercise. The sales of this product are taxable. 12/20/93.

245.1122 ANABAENA Flos Aqua is a freeze dried product consisting of pure premium blue-green algae. It is labeled as a pure food product and contains naturally chelated vitamins, minerals, lipids, nucleic acids, chlorophyll, amino acids, and enzymes. Regulation 1602 provides that ". . . unusual foods such as brewer's yeast, wheat germ, and seaweed are not subject to tax unless their label states they are a food supplement or the equivalent." As such, ANABAENA Flos Aqua is a food product unless it is labeled as a food supplement. 11/16/81. (Am. 2010-1).

245.1128 Cambridge Diet. Cambridge Diet is a dietary supplement or adjunct the sale of which is subject to sales tax. 3/17/83.

245.1128.010 Cambridge Diet and Nutrition Bar. The Cambridge Diet and Nutrition Bar is described as "a delicious addition to the Cambridge Weight-Loss Program" and a "carefully balanced nutritional supplement for the Cambridge Nutrition Program." The bar is carob coated, peanut flavored, and is sold in bar form. Each 11 gram bar provides the user with 150 calories, 11 grams of protein, 17 grams carbohydrates, and 4 grams of fat. The user is advised of two patents, both of which are for inventions concerning dietary supplements and dietary methods for employing said supplements for the treatment of obesity. The company also states that the diet can be used as a nutritional supplement separate and apart from the weight loss program.

It is concluded that the "Cambridge Diet and Nutritional Bar" is sold as a dietary supplement. However, section 6359 specifically excludes from the term "food products" dietary supplements in liquid, powdered, granular, tablet, capsule, lozenge, and pill form. Since the Cambridge Diet and Nutrition Bar is not sold in any of these specified forms, it is outside the exclusion from the exemption from tax under section 6359 for "food products." Therefore, tax does not apply to the sale or use of this product. 9/27/83.

245.1132 Chocolate Chiffon Shake Mix. The label describes this product as a "Nutritional Diet with Aloe and Fiber" and as a meal replacement. The shake, if used as the sole source of nutrition, provides a daily intake of only 270 calories and 33 grams of protein, considerably less than the standard for a "complete dietary food." This product is a dietary supplement the sale of which is subject to tax. 6/17/91.

245.1153 Dietary Supplementary Fibersonic. Fibersonic is a powder to be blended with milk to give the liquid a "milk-shake" texture. It is designated as a dietary supplement and therefore is excluded from the definition of "food products" by Regulation 1602 (a)(5). Its sales are subject to tax. 3/11/91.


Back to top

245.1155 Dietetic Cookies. Retail sales of Estee Assorted Dietetic Cookies are not subject to sales tax. Such cookies are not dietary supplements since they are not ". . . preparations in liquid, powdered, granular, tablet, capsule, lozenge, and pill form. . . ." (Section 6359.) deletion 10/17/72. (AM 2017).

245.1203 Edge Bars. The product Edge Bar has been determined to be an exempt food product because it is not in one of the forms to which Regulation 1602(a)(5) applies nor is it described on its package or label as a food supplement, food object, dietary supplement or dietary object, nor designed to remedy specific dietary deficiencies. deletion 12/14/92. (AM 2017).

245.1205 Energy Bars. (Shaklee) Food bars are listed as food products in Regulation 1602(a)(1) because the Energy Bar is not one of the forms of food products to which the conditions of Regulation 1602(a)(5) apply. Its sales are exempt from tax. deletion 11/26/90. (AM 2017).

245.1205.5 Fiber Bars. Fiber bars are not taxable dietary supplements since they are not preparations in liquid, powdered, granular, tablet, capsule, lozenge and pill form. (Regulation 1602(a)(5).) Fiber bars are food bars, comparable to candy, which is one of the products defined as "food products" by Regulation 1602 (a)(1), the sales of which are exempt from tax. 3/11/91.


Back to top

245.1206 Gold's Nutritionalysis 100% Pure Milk/Egg Protein Powder. This is a powdered drink mix described as "an excellent protein drink supplement." Since it is sold as a diet supplement, it is subject to the tax. 10/29/91.

245.1215 Juice Plus+. This product provides natural fruit powders, fruit fibers, and food enzymes, along with food actives and acidophilus. Although Juice Plus+ is in capsule form, the label does not state that it is either a food or dietary supplement or adjunct. It also does not indicate that the purpose of the product is to increase, decrease, or maintain the intake of vitamins, minerals, proteins, or calories. The supplier states ". . . being sold as a real food, not a food supplement, vitamin or diet product." Therefore, it is considered a food product, the sales of which are exempt from tax under Regulation 1602(a)(1). 12/16/93. (Am. 2010-1).

245.1216 Juice Plus + Thins. Juice Plus + Thins is sold in tablet form and is described as a food supplement. Therefore, it does not meet the definition of a "food product" under Regulation 1602(a)(5) and its sales are subject to tax. 11/18/96.

245.1241 Medifast and Pro-Call 100. Medifast and Pro-Call 100 are food products. 9/8/89.

245.1244 Met-Rx Bar Product. A food bar of this type qualifies as a food product under Regulation 1602 since it is not one of the seven forms (e.g., liquid, powder, etc.,) which is excluded from qualification. 6/27/95.


Back to top

245.1244.025 Met-Rx Powdered Drink Mix. This product is sold in powdered form and is described as a food supplement on the label. Therefore, sales or use tax applies to sales of this product. 6/27/95.

245.1246 Mini Vitamin Tablets. Mini Vitamin Tablets are described as a "High-Potency Multi-Mineral Formula", a dietary supplement. This is a product, in tablet form, described as a dietary supplement. Its sales are subject to tax. 6/17/91.

245.1263 Optifast 70 and Optifast 800. Optifast 70 and Optifast 800 are used as a total meal replacement in connection with a weight loss program. Patients participating in the weight loss program are medically supervised by a physician. Optifast products are available by prescription only and are not available to the general public.

Even though Optifast 70 and Optifast 800 do not qualify as "complete dietary foods" under Regulation 1602(a)(5), they do qualify as "medicines" under Regulation 1591(b)(1). Accordingly, because these products must be furnished to patient by physicians pursuant to a medically supervised program for treatment of obesity, they are nontaxable under Regulation 1591(a)(2). 3/16/92.

245.1268 Pollen, Royal Jelly and Forever Bee Propolis. Where bee pollen products are sold in tablet form, they are, if sold as food supplements or weight-loss aids, excluded from the term "food products" and their sales are subject to tax. 6/17/91.

245.1268.300 Power Bar. Power Bar is a candy bar or cookie fortified with vitamins and minerals. As such, it is a tax exempt food product under Regulation 1602. 5/30/90.

245.1269 Probioplex. Probioplex is a powdered product described as a dietary supplement. Sales of this product are subject to tax. 6/5/91.

245.1270 Pro-Life Protein Formula 96. Tax applies to the sale of Pro-Life Protein Formula 96, because it is sold as a protein dietary supplement rather than an exempt "food product." 12/7/77.

245.1280 Protesoy is a dietary supplement or adjunct, not exempt food product, and sales of it are subject to tax. 4/14/69.


Back to top

245.1284 Sea Fish Oil Capsules. Sea Fish Oil Capsules label states that this product provides a rich source of Omega-3 fatty acid and olein acid and that supplementation with Arctic-Sea capsules is an excellent way to increase your polyunsaturated fat intake. Since this capsule product is labeled as a food supplement, its sales are subject to tax. 6/17/91.

245.1286 Shaklee Products—Taxable. Shaklee Instant Protein Drink Mix is a taxable food supplement. 11/27/91.

245.1288 Slim Fast and Ultra Slim Fast Powdered Mix. Slim Fast and Ultra Slim Fast Drink Mix sold in powdered form are taxable dietary supplements. Since the label states that the product is sold for the purpose of aiding weight loss these products are excluded from the definition of a food product pursuant to Regulation 1602(a)(5). 10/31/84; 12/31/90; 6/17/91.

245.1293 Somatogain. The label identifies Somatogain, which is in powdered form, as a dietary supplement. The label further states each serving contains 156 calories and 0 grams of protein, and contains the statement: "Not a significant source of fat, cholesterol, dietary fiber, vitamin A, vitamin C, and iron."

Based on the nutrition facts listed on the label, this product does not contain sufficient amounts of protein, calories, and other vitamins and minerals for it to be considered a complete dietary food as that term is defined in Regulation 1602. Therefore, its sales are subject to tax. 07/01/96.

245.1295 Spirulina. Spirulina, a type of seaweed, qualifies as a food product, provided it is not labeled as a food supplement or dietary adjunct, or make any claims concerning medicinal or dietary benefits. Like kelp, Spirulina labeled as a dietary supplement would not be considered a food product and its sale would be taxable. 6/1/89.

245.1296 Spirulina Plankton. Spirulina Plankton is a dehydrated vegetable aquatic organism in powdered form. It is a food source containing up to 71 percent vegetable protein, vitamins, minerals, trace elements, and chlorophyll. Regulation 1602 provides that ". . . unusual foods such as brewer's yeast, wheat germ, and seaweed are not subject to tax unless their label states they are a food supplement or the equivalent." As such, Spirulina Plankton is a food product unless the label indicates it is a food supplement. 4/27/81. (Am. 2010-1).


Back to top

245.1328 Taxable Supplements. The following products are subject to tax when sold at retail.

  • Wow
  • Focus
  • Be Your Best!
  • Go For It!
  • 2/3/94.

245.1364 Finhalsa. Finhalsa is a food bar, not in liquid, powdered, granular, tablet, capsule, or pill form. It is similar to a candy bar and is within the definition of "food product.deletion" deletion 4/18/91. (AM 2017).

245.1367 Food for Life Soups and Cereals. Food for Life soups and Super Oats cereal are food products because both categories are specified as such in Regulation 1602(a)(1), even though they may be in dehydrated form when sold. 4/24/91.

245.1370 Bee Pollen. The following products are considered as exempt food products since they are not described on their labels as food supplements.

(1) Whole Grain Bee Pollen

(2) Kid-Bees Bee Pollen

(3) Bee Pollen Tablets

(4) Bee Propolis

The following products do not qualify for the "food product" exemption since capsule or granular forms are described on the label as dietary supplements.

(1) Royal Energizer—Royal jelly for the Lady

(2) Royal Energizer—For Men

(3) Weight-Bee-Ter—All Natural Diet System. 9/28/64.


Back to top

(c) CANDY AND CONFECTIONERY (Taxable July 15, 1991 to Nov. 30, 1992.)

245.1380 Glaced Fruit. Glaced fruit normally is considered as a confection and subject to tax. If, however, it is used in cooking food product, such as a fruit cake, it would be exempt. The type of package in which it is sold, such as a plain box with cooking directions on it would be evidence that it was sold for cooking purposes rather than as a confection. 6/24/53.

(d) SPECIFIC PRODUCTS

245.1410 Advance. Advance is a nutritional beverage which is specifically formulated to meet the total nutritional needs of older babies. This product is recommended for use either as a supplement to mother's milk, or as an alternative to cow's milk. Thus, Advance qualifies as a food product and, its sales are not subject to tax. 7/30/84.

245.1415 Calistoga Juice. Calistoga Juice, which has carbonation, is classified as a carbonated beverage, even though it contains natural fruit juices. Thus, sales of Calistoga Juice are subject to tax. 5/31/90.

245.1415.250 Crystal Geyser Sparkling Mineral Water. This product is a carbonated beverage and, thus, it is not a food product. Sales of this product are subject to tax. 4/28/97.


Back to top

245.1416.450 Dr. Chen's Secret Sauce. This is a barbecue sauce described as made from all natural ingredients. This item qualifies as a food product and its sales are exempt from tax. 4/7/94.

245.1416.500 Dried Seaweed, Algae, and Wheatgrass. These products are sold in powdered form. Dried seaweed, algae, and wheatgrass in powdered form are exempt food products provided that the label or packaging makes no claim of the products' dietary benefits. 8/23/93. (Am. 2010-1).

245.1418 Fibermed. "Fibermed" biscuits are substantially a cereal product described as a "high fiber supplement." Since they are not in liquid, powdered, granular, tablet, capsule, lozenge, or pill form, their sales are not subject to tax. 5/22/86.


Back to top

245.1446 Fortune Delight. This product is described as having herbal ingredients. If the label does not designate it as a food supplement, it qualifies as a food product the sales of which are exempt from tax. 4/7/94. (Am. 2010-1).

245.1483 Hops Used in Brewing Beer. When breweries are the consumers of the beer they produce, ingredients which are food products are exempt even though incorporated into a taxable beverage. Such ingredients as sugar, corn grits, soy bean flakes, etc., are food products meeting this test. Hops are considered a flavoring extract and therefore a food product. Chemical additives are not food products and are subject to tax. 9/26/69. (Am. 2000–1).

245.1489 Isomil. Isomil is a powdered, milk free baby food which is used as the only source of nutrients if the infant is unable to ingest milk or dairy products. Sales of Isomil are exempt as a food product. 1/4/89.

245.1497 Lecithin. This product is sold in whole, bulk form. Lecithin is a food product whose sale is exempt provided that the label or package makes indication that the product is sold as dietary supplement or adjunct. 8/23/89. (Am. 2010-1).

245.1520 Mil-Kee-Whey. This product is a whey based food beverage drink composed principally of dairy whey, nonfat dry milk, milk protein, and corn syrup. The label does not describe it as a food supplement nor does it make any weight loss claims. Mil-Kee-Whey is a food product the sale of which is therefore exempt from tax. 1/23/84. (Am. 2010-1).

245.1588 Nature's Sunshine Products. The following named products of Amtec Industries, Inc., marketed under the Nature's Sunshine Product label were found to be food products although they are sold in capsule form because the label makes no claims that would make them food or dietary supplements or adjuncts. They generally are used as spices or seasoning, or to make teas or soups. They are all within the classification of "unusual foods" under Regulation 1602(5):

  • Black Walnut GingerAlfalfa
  • Chickweed Gotu Kola
  • Combination GRH-X Kelp
  • Garlic Licorice Root

Concentrated chickweed, alfalfa, and black walnut are also within the definition of unusual food. 9/28/82.


Back to top

245.1616 Onion International Iris Herbs and Herbal Products. The following are unusual foods and qualify as food products for human consumption. As such, tax does not apply to the sale or use of the following products:

  • Super Energy (Item #201–30) Beet Powder (Item #607–60)
  • Natural Energy Plus (Item Herb Kal (Item #608–60)
  • #205–30) Nature Trim 200 (Item
  • Kola Nut (Item #202–30) #1402–30)
  • Nature Trim 100 (Item #401–30) Nature Trim 102 (Item
  • Cy-Nus (Item #807–30) #1403–30)
  • FE-30 (Item #803–30) Lifeforce (Item #601–30)
  • HRPEZ (Item #810–30) Lifeforce PM (Item #402–30)
  • Colon Clenz (Item #811–30) Lifeforce III ( Item #604–30)
  • Skin Care (Item #813–30) Mead Pak (Item #601–30)
  • CCF (Item #912–60) Nature Calm (Item #602–30)
  • Lifeforce III B (Item #604–30B) CFY (Item #603–30)
  • Lifeforce III C (Item #604–30C) Arth-Ry-Tus (Item #804–30)
  • Sod Ginseng (Item #605–30) AL-R-G (Item #606–60)
  • STRS (Item #606–30) Arth-Ry-Tus Pan (Item #805–60)

The following items are described on its label as a "food supplement" and they do not qualify as exempt food products. Tax applies to the sale or use of the following products:

  • 079 Spiruline
  • 077 Spiruline Ginseng
  • 026 Lifeforce Junior. 2/16/84.

245.1620 Osmolite. Osmolite is an isotonic liquid food which is designed for patients who are particularly sensitive to hyperosmotic feeding, and can be used for the total or supplemental nutrition by oral feeding. The principal ingredients are water, hydrolyzed corn starch, sodium and calcium casenates, coconut oil, and soy protein.

Since Osmolite is not sold as a dietary supplement or adjunct, it comes within the definition of a "food product" as provided under section 6359. 3/7/84

245.1630 Pedialyte. Sales of Pedialyte are nontaxable. 5/29/96.


Back to top

245.1632 Pedialyte and Other Dehydration Products. The following products are nontaxable food products:

  • Pedialyte® Oral Electrolyte Maintenance Solution—Freezer Pops
  • Naturalyte® Oral Electrolyte Solution
  • Infalyte® Oral Electrolyte Maintenance Solution
  • Kao Lectrolyte™ Electrolyte Replenisher (power packets)
  • Isomil® DF Soy Formula For Diarrhea. 5/16/97.

245.1633 PediaSure. When a product coming within the general definition of food product is labeled as a supplement, it is excluded from the definition of food unless qualifying as a complete dietary food for purposes of subdivision (a)(5) of Regulation 1602. It was previously concluded that Ensure and products substantially identical in labeling and content to Ensure qualify as complete dietary foods. PediaSure is labeled for use by children aged 1 to 10 and has slightly less nutritional content than does Ensure. If PediaSure's label were consistent for use by adults, its nutritional content would be insufficient to be regarded as a complete dietary food. However, when used as labeled, PediaSure has at least the same nutritional value for children aged 1 to 10 as does Ensure for adults, which is consistent with its labeling that it can be used for "total nutritional support." As such, PediaSure qualifies as a food product, sales of which are exempt from tax. 9/9/99. (2000–2).

245.1705 Simply Nutritious Mega C. This is a noncarbonated fruit juice that has been fortified with vitamin C. Since the label does not indicate it is a food or dietary supplement or adjunct, this product is a food item, the sale of which is exempt from tax. 3/16/98. (Am. 1999–2). (Am. 2010-1).

245.1716 Sun Bars. This is an individually-wrapped "granola-type" food bar which is considered a food product and, thus, its sale is not subject to tax. 4/7/94.

245.1720 Sundance Natural Juice Sparkler. This product is carbonated and contains only 70% fruit juice. As such, its sale is taxable as a carbonated beverage. 11/13/89.

245.1740 Sunny Days. This is a mouthdrop which is for the purpose of freshening breath. Sales of this product are subject to tax. 4/7/94.

245.1780 Sustacal. Sustacal is a nutritionally complete food in liquid form and may be used either as a meal substitute or taken as a person's sole source of nutrition. This product qualifies as a food product and, therefore, its sales are not subject to tax. 7/30/84.


Back to top

245.1820 Tom and Jerry Batter and Eggnog Batter. Tom and Jerry Batter and Eggnog Batter are exempt food products even though their principal use is as ingredients of alcoholic drinks. The batters themselves are made of ingredients which are themselves food products and they are ultimately intended for human consumption. Accordingly, the sales of these products are exempt as food products for human consumption. 12/1/50.

245.1830 Trader Joe's Lecithin Granules. These are sold in a one pound bag. No claim has been made regarding this product. The label states only the name of the product, the weight, the nutritional value of one tablespoon, and the caloric count per gram.

Lecithin Granules are not considered "food products." They are a dietary or food supplement designed to remedy specific dietary deficiencies consisting of ingredients which have been specially mixed or compounded for the purpose of providing a high nutritional source. Tax applies to the sale of Lecithin Granules. 6/5/78.

245.1900 Vantage Plus. Vantage Plus is a powder that can be mixed with other foods and beverages. The label from Vantage Plus states that the product is "A Complete Meal Replacement," and that it can be used as a "nutrition enhancer" or "nutritious alternative." Furthermore, its label does not indicate that it is designed to increase or decrease user's vitamin, protein or caloric intake, nor is it described as a dietary or food supplement. Thus, Vantage Plus is a food product under Regulation 1602 and its sales are not subject to tax. 10/1/84.

245.1904 Vitalite Snacks. The label describes this product as "Dried Seasonal Fruits and Vegetables." Dehydrated foods generally are considered as "food products" the same as their regular form. Thus, sales of these products are exempt from tax. 4/7/94.

245.1910 "Wine Without Alcohol." "Wine Without Alcohol" is 99.51% alcohol free and is not carbonated or effervescent.

Although this wine product would not be considered an alcoholic beverage pursuant to section 23004 of the Business and Professions Code, for sales and use tax purposes such products are considered wine notwithstanding their containing less than 0.505% alcohol. This product falls within the category of spirituous or vinous liquors because it is the fermented juice of the grape and contains alcohol. Sales of this beverage are not sales of food products under Regulation 1602. 7/31/86.


Back to top

245.1920 Wonder Bee Royal Jelly and Kiku Royal Jelly. Royal jelly falls into the category of "unusual food" as long as the label does not describe it as a "food supplement" or the equivalent. Accordingly, Wonder Bee Jelly is a "food product" since its label and the accompanying literature does not describe it as a dietary food supplement. On the other hand, Kiku Royal Jelly is labeled as a "nutritional dietary food supplement". Therefore, it does not qualify as a food product and its sale is subject to tax. 10/25/89.