Did adding ascorbic acid or another substance naturally occurring in fruit juice make an otherwise qualifying 100% carbonated juice taxable?

Plain-English summary

Earlier guidance treated 100% natural carbonated fruit juice as an exempt food product but said preservatives such as sodium benzoate or other additives could make the sale taxable.

The requester asked whether added citric acid or ascorbic acid, also known as Vitamin C, had that effect. Senior tax counsel concluded that a substance naturally occurring in fruit juice was not the kind of additive that disqualified an otherwise qualifying 100% carbonated fruit juice under Regulation 1602(a)(2).

Added ascorbic acid therefore did not defeat the food exemption. The letter cautioned that the conclusion did not cover every substance that might be described as natural; it applied to substances that naturally occur in fruit juice.

Common questions

Did added Vitamin C automatically make carbonated juice taxable?

No. Ascorbic acid naturally occurs in fruit juice and did not disqualify an otherwise qualifying product.

Did the opinion exempt every natural additive?

No. It limited the rule to substances that naturally occur in fruit juice.

How did the letter treat preservatives such as sodium benzoate?

It repeated earlier guidance that such preservatives or other disqualifying additives could make the carbonated product taxable.

Citations and references

• California Sales and Use Tax Regulation 1602(a)(2) (as cited)
• Sales and Use Tax Annotation 245.0285 and its March 5, 1987 supporting opinion — historical guidance quoted and discussed
• Requester's September 15, 2003 facsimile letter, August 7, 2003 letter to Tax Counsel IV John A. Abbott, and Abbott's June 19, 2003 letter — correspondence described; none reproduced in the official PDF
• Legal principles explained in Abbott's June 19 letter — incorporated by reference but expressly omitted from the official PDF
• Prior Board conclusion concerning substances that naturally occur in fruit juice — described without an identifying citation or reproduced opinion in the official PDF
• No-seller's-permit status in the letter's subject block — status stated; underlying permit application, registration, or account records not reproduced in the official PDF
• Possible later correspondence, product facts, sale, audit, assessment, refund claim, appeal, or other agency action — 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/245-0287.pdf
• Earlier official opinion discussed: https://cdtfa.ca.gov/lawguides/annotations/245-0285.pdf

Original ruling text

245.0287

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

CAROLE MIGDEN
First District, San Francisco, CA

450 N STREET, SACRAMENTO, CALIFORNIA
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0083
TELEPHONE (916) 445-4380 LEGAL DEPARTMENT
FAX (916) 323-3387

BILL LEONARD
Second District, Ontario, CA

www.boe.ca.gov

CLAUDE PARRISH
Third District, Santa Ana, CA
JOHN CHIANG
Fourth District, Los Angeles, CA

October 28, 2003

STEVE WESTLEY
State Controller, Sacramento

Timothy W. Boyer
Interim Executive Director

Mr. [T]
Law Offices of [T]
XXXXX --- ---, Suite XXX
--- ---, California XXXXX-XXXX
Re:

[No Seller’s Permit]
Vitamin C as Food Additive

Dear Mr. [T]:
I am answering your letter that you sent to me by facsimile transmission on September 15, 2003. You were following up on your letter to Tax Counsel IV John A. Abbott dated August 7, 2003, following up on Mr. Abbott’s letter to you dated June 19, 2003 on this subject. Mr. Abbott explained to you the legal principles underlying this area and so, for the sake of brevity, we will not repeat them here. As Mr. Abbott explained in his letter, under Annotation 245.0285 (3/5/87) carbonated fruit juices are still considered “food products” if they contain 100% natural fruit juice. “If the carbonated product includes a preservative, such as sodium benzoate, or any other additive, it will not be considered a natural fruit juice and tax will apply to its sale.” You ask if naturally occurring substances such as citric acid and/or ascorbic acid (Vitamin C) are the kinds of “other additive” that place a carbonated 100% fruit juice drink in the category of non-food products the sales of which are subject to tax. We have previously concluded that a substance that naturally occurs in fruit juices is not the kind of additive that would cause a carbonated 100% fruit juice to be excluded from food products under Regulation 1602(a)(2). This is not to say that all natural substances that might be added to fruit juice will not cause a carbonated 100% fruit juice to be deemed a non-food product, but only substances that naturally occur in fruit juice. Therefore, even if a 100% carbonated fruit juice has added ascorbic acid, it will still be considered a food product within the meaning of Regulation 1602(a)(2) if it otherwise qualifies as such. Thus, the juice’s sales would not be subject to tax.

Mr. [T]

-2-

October 28, 2003
245.0287

I hope the above discussion has answered your question. If you need anything further, please do not hesitate to write again. Sincerely,

John L. Waid
Senior Tax Counsel