California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 4 - Sales and Use Tax › Article 8 - Food Products and Meals › Section 1602 - Food Products

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) In
				  General. Tax does not apply to sales of food products for human consumption
				  except as provided in Regulations 1503, 1574, and 1603. (Grocers, in
				  particular, should note that tax applies to sales of "hot prepared food
				  products" as provided in Regulation 1603(e).)
(1) "Food products" include cereal and cereal
				  products, including malt and malt extracts, milk and milk products, including
				  ice cream, ice milk and ice cream and ice milk novelties, sherbets, imitation
				  ice cream and imitation ice milk, dried milk products, sugar of milk, milk
				  shakes, malted milks, and any other similar type beverages composed at least in
				  part of milk or a milk product and requiring the use of milk or a milk product
				  in their preparation, oleomargarine, meat and meat products, fish and fish
				  products, eggs and egg products, vegetables and vegetable products, including
				  dehydrated vegetables, fruit and fruit products, spices and salt, coffee and
				  coffee substitutes, tea, cocoa and cocoa products, sugar and sugar products,
				  baby foods, bakery products, marshmallows, baking powder, baking soda, cream of
				  tartar, coconut, flavoring extracts, flour, gelatine, jelly powders, mustard,
				  nuts, peanut butter, sauces, soups, syrups (for use as an ingredient of, or
				  upon, food products as defined herein), yeast cakes, olive oil, bouillon cubes,
				  meat extracts, popcorn, honey, jams, jellies, certo, mayonnaise, and flavored
				  ice products, including popsicles and snow cones. "Food products" include
				  candy, confectionery, and chewing gum.
(2) "Food products" include all fruit juices,
				  vegetable juices, and other beverages, whether liquid or frozen, including all
				  beverages composed in part of fruit or vegetable juice and concentrates,
				  powders, or other bases for such beverages, and noncarbonated and
				  noneffervescent bottled water [intended for human consumption regardless of the
				  method of delivery]. "Food products" does not include carbonated or
				  effervescent bottled waters, spirituous, malt or vinous liquors, or carbonated
				  beverages.
Sales of purified drinking water through vending machines
					 or outlets in retail stores where the water enters the machine or outlet
					 through local supply lines and is dispensed into the customer's own containers
					 are exempt under Revenue and Taxation Code section
					 6353.
Tax does not apply to sales of water in bulk quantities of
					 50 gallons or more to an individual for use in a residence when that residence
					 is not serviced by lines, mains or pipes.
(3) "Food products" do not include medicines,
				  cough drops, mineral oils, cigarettes, cigars, tobacco, coloring extract, ice,
				  and dog, cat, bird and other animal foods.
(4) "Food products" do not include any
				  product for human consumption in liquid, powdered, granular, tablet, capsule,
				  lozenge, or pill form (A) which is described on its package or label as a food
				  supplement, food adjunct, dietary supplement, or dietary adjunct, and to any
				  such product (B) which is prescribed or designed to remedy specific dietary
				  deficiencies or to increase or decrease generally one or more of the following
				  areas of human nutrition:
1.
				  Vitamins
2. Proteins
3. Minerals
4. Caloric intake
In determining whether a product falls within category (B),
					 it is important whether the manufacturer has specially mixed or compounded
					 ingredients for the purpose of providing a high nutritional source. For
					 example, protein supplements and vitamin pills are taxable as food
					 supplements.
Other items, such as cod liver oil, halibut liver oil, and
					 wheat germ oil, are considered dietary supplements and thus subject to tax even
					 though not specially compounded.
However, unusual foods such as brewer's yeast, wheat germ
					 and seaweed are not subject to tax except when their label states they are a
					 food supplement or the equivalent. Finally, the compounding of nutritional
					 elements in items traditionally accepted as food does not make them taxable,
					 e.g., vitamin-enriched milk and high protein flour.
Tax, however, does not apply to any such products which
					 either are exempted by Revenue and Taxation Code Section
					 6369,
					 respecting prescription medicines, or are complete dietary foods providing the
					 user in the recommended daily dosage with substantial amounts of vitamins,
					 proteins, minerals and foods providing adequate caloric intake. The latter is a
					 food if it provides the user with the following daily minimums:
1. 70 grams of high quality protein
2. 900 calories
3. Minimum daily requirements as established
				  by the regulations of the Federal Food and Drug Administration of the following
				  vitamins: A, B1, C, D, Riboflavin, and Niacin or Niacinamide; and the following
				  minerals: Calcium, Phosphorus, Iron and Iodine.
When supplement or adjunct products that do not meet the
					 definition of food under this subdivision are furnished by a physician to his
					 or her own patient as part of a medically supervised weight loss program to
					 treat obesity, such products are regarded as "medicine." The sale and use of
					 such products are exempt from tax pursuant to subdivision (e)(7) of Regulation
					 1591 which interprets and explains Revenue and Taxation Code section
					 6369.