Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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F

245.0000 FOOD PRODUCTS—Regulation 1602

Annotation 245.0485

(a) IN GENERAL

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.