Was peat used in nursery growing beds exempt because some of it later clung to plant roots at sale?

Plain-English summary

California reaffirmed that peat sold to a nursery for use in growing beds was taxable. The result did not change because some peat might cling to plant roots when the plants were sold.

The letter says peat used in growing beds differed sufficiently from peat placed in pots or cans with plants, but it does not state the full tax conclusion for the pots-or-cans scenario.

Common questions

Did later transfer of some peat with the roots make the growing-bed purchase exempt?

No.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/195-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/195-0860.pdf

Original ruling text

195.0860

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

November 17, 1953

B---, N--- & P--Attorneys at Law
XXX --- Boulevard
--- --- XX, California
Attention:

AA-XXXXXX
R--- F. W--- & Co.

Mr. J--- L. W---

Gentlemen:
We have carefully considered the contents of your letter of October 15. While there may be some similarities between the use of peat in growing beds and its use by placing in pots or cans in which plants are placed and ultimately sold together with the pot or can and its contents, we believe there is a sufficient difference to warrant a different application of the tax with respect to the peat. We, therefore, reaffirm our previous opinion that the sale of the peat to the nursery which uses it in growing beds is subject to the tax, regardless of the fact that a portion thereof may cling to the roots of the plants as they are sold. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ph
cc:

Los Angeles – Tax Administrator