Were listed growth-promoting and disease-preventing ingredients taxable when incorporated into qualifying animal feed?

Plain-English summary

All substances on the manufacturer's attached list were nontaxable under two express assumptions: each ingredient was actually incorporated into feed, and that feed was used or sold for animals whose products ordinarily constituted human food.

Vitamins and minerals used to promote growth became part of exempt feed under Regulation 1587(b). Drugs and medicines used to prevent or control disease could likewise be bought tax-free because the resulting product was exempt medicated feed under Regulation 1587(b)(2)(B), as then cited.

The attachment covered vitamin premixes, trace minerals, coccidiostats, antibiotics, a wormer, a furan, a sulfa product, and other named growth or disease-control ingredients. The conclusion did not dispense with the letter's incorporation and qualifying-animal assumptions.

Citations and references

• California Sales and Use Tax Regulation 1587(b) and (b)(2)(B) (as cited)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/110-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/110-0650.pdf

Original ruling text

110.0650

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
(916) 445-6493

August 30, 1985

Ms. A. M--- C--Tax Accountant
--- --P. O. Box XXX
---, CA XXXXX
Re:

--- --- (SY -- XX-XXXXXX)
Drugs used in feed manufacturing

Dear Ms. C---:
In your June 18, 1985 letter to Mr. Dalton B. Leech, Senior Tax Auditor for the Board’s [city] office, which was referred to the legal section for response, you write: Enclosed, please find a list of all the drugs we are using in the feed manufacturing process. I have given the name of the drug, what it is used for and the type of drug. We would like to have a ruling from the Board as to whether these drugs are taxable or not. As soon as we receive a ruling on the attached list, we will notify al our vendors accordingly. I have enclosed with this letter, as Attachment A, the list you included with your letter. I assume that all the substances listed on Attachment A are, in fact, incorporated into the feed which --- --uses or sells, and I also assume the feed so used or sold is feed for animal life of a kind the products of which ordinarily constitute food for human consumption. Our opinion is that all these substances are nontaxable under the assumptions noted above, regardless of whether the substance is used to promote growth or to prevent disease in animals which consume the feed. Under Sales and Use Tax Regulation 1587(b), vitamins and minerals added to exempt feed to promote growth become part of the exempt feed and may be purchased from vendors ex-tax for this purpose. Likewise, those drugs and medicines added to exempt feed to prevent and control disease, may be purchased from vendors ex-tax for this purpose, since the resulting product is exempt medicated feed. Regulation 1587(b)(2)(B).

Ms. A. M--- C---

-2-

August 30, 1985
110.0650

I enclose a copy of Regulation 1587 for your information. Please feel free to contact me if you have further questions or comments about this letter. Very truly yours,

John Abbott
Tax Counsel

JA:sr
Attachment

Ms. A. M--- C---

-3-

August 30, 1985
110.0650

FEED INGREDIENTS
NAME

USAGE

TYPE OF INGREDIENT

ADRK Prmx 83
Olson Layer Prmx
Stutts Starter Prmx
BV Supp. E. Prmx
Manganese Sulfate
T-Vit SB 83
T-Vit G 83
Trace #10
Amprol
Amprol Plus
A D & E Prmx
Corbosep
Coban
CTC 50
Bacitracin MD 50
Ipropran
Gallimycin
Furox 100 & 180
Stepcillin F-25
Pen Strep
Piperazine
TM 50 & 100
Tylan 10
Nopstress
Vitamin D & E
Linocomix
Flavomycin
Bio Cox
Rofenaid

Growth
Growth
Growth
Growth
Growth
Growth
Growth
Growth
Prevent Disease
Prevent Disease

Vitamin Premix
Vitamin Premix
Vitamin Premix
Vitamin Premix
Trace Mineral
Vitamin Premix
Vitamin Premix
Trace Mineral
Coccidiostat
Coccidiostat
Vitamins
Blackhead
Coccidiostat
Antibiotic
Antibiotic
Blackhead
Antibiotic
Furan
Antibiotic
Antibiotic
Wormer
Antibiotic
Antibiotic
Vitamin – H20
Vitamin
Antibiotic
Antibiotic
Coccidiostat
Sulfa

Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Prevent Disease
Growth
Growth
Growth
Prevent Disease
Prevent Disease