Was an Enfamil Nursette package exempt when infant formula, a disposable bottle, and a pre-sterilized nipple were sold together?

Plain-English summary

The infant formula itself was exempt food. The disposable bottle was an exempt nonreturnable container.

When a pre-sterilized disposable nipple unit was included in the package, the Board treated the entire sale as exempt because the package essentially contained food, its nonreturnable container, and the nipple needed to feed from the bottle.

The result changed for separate sales. Replacement or otherwise separately sold nipples were taxable. Separately sold sterile water was also taxable because the source said only water delivered through mains, lines, or pipes was exempt.

Common questions

Was the included disposable nipple taxable?

Not when sold as part of the described formula package.

Were replacement nipples exempt?

No. Separately sold nipple units were taxable.

Was sterile water sold by the company exempt?

No. The letter treated those separate sales as taxable.

Citations and references

• California Sales and Use Tax Law food, nonreturnable-container, and water exemptions — applied without section citations in the official letter
• February 17, 1965 letter requesting a ruling on Enfamil Nursette infant formula in a disposable bottle — request and product described; letter not reproduced in the official PDF
• Product literature concerning the Enfamil Nursette infant formula — relied on for the food conclusion; date, title, and copy not included in the official PDF
• Redacted distributor's Enfamil Nursette package, separately sold nipple units, and sterile-water sales — products and treatment described; underlying formula, ingredients, packaging, labels, literature, price lists, invoices, delivery records, and distribution agreements not reproduced in the official PDF
• Possible later sales, return treatment, audit, assessment, refund claim, appeal, product change, or agency action after the opinion — no follow-up or final outcome supplied in the official PDF

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/245-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/245-0080.pdf

Original ruling text

245.0080

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001
TELEPHONE (916) 445-6450

March 29, 1965

[M]
XXX --- ----- --- X, California
Attention:

Mr. [B]
Western Distribution Manager

-- - XX-XXXXXX

Gentlemen:
Under date of February 17, 1965, you addressed us a letter concerning a product ENFAMIL NURSETTE, an infant formula in a disposable formula bottle. You ask for a ruling as to whether this product is taxable. The formula itself, according to your literature, would be exempt as a food for human consumption. In addition, the disposable formula bottles in which the formula is sold would be considered as exempt non-returnable containers. If the pre-sterilized disposable nipple units are included in the package sold, we would consider the entire package to be an exempt sale, since it consists essentially of a food item in a non-returnable container, with the necessary nipples for feeding out of the bottle. If, however, the nipple units are separately sold, e.g., as replacements, or for any other reason, such separate sales could not be considered exempt. We note that among the products you sell is sterile water. There is no exemption of sales of water, except water delivered through mains, lines, or pipes. Therefore, your sales of sterile water are not within the exemption. Very truly yours,

E. H. Stetson
Tax Counsel
EHS:fb
cc:

San Francisco – District Administrator