Were fresh sardines exempt when sold to fishermen as bait rather than for human consumption?

Plain-English summary

Fresh sardines sold to fishermen for use as bait were taxable. Although sales of fresh sardines for human consumption were exempt, the same product did not receive that treatment when sold as fish bait.

The letter extended the conclusion to sardines or other fish or animal products used as bait. It also said that contrary advice reportedly given by a field auditor was erroneous.

The published annotation frames the rule as applying to nonliving fish or animal products not intended for human consumption under section 6358(a). It refers readers to Annotation 110.0150 for live fish bait.

Common questions

Did the product being fresh sardines make the sale exempt?

No. The intended use mattered: the described sales were to fishermen for bait, not for human consumption.

Did an auditor's earlier statement make the sales nontaxable?

No. The legal staff called that advice erroneous.

Does this opinion decide the treatment of live bait?

No. The published annotation directs readers to Annotation 110.0150 for live fish bait.

Citations and references

• California Revenue and Taxation Code section 6358(a) — identified in the published annotation; not cited in the supporting letter
• CDTFA Annotation 110.0150 — live fish bait cross-reference in the published annotation
• Redacted seller's April 30, 1960 letter concerning its December 1959 sales tax return — referenced; letter and return not reproduced in the official PDF
• Napa office auditor's reported advice that fresh-bait sales were not taxable — described through the seller's statement; auditor identity, date, notes, and correspondence not reproduced in the official PDF
• Board steps intended to prevent further field dissemination of the erroneous advice — action stated; instructions, notices, training materials, and implementation records not reproduced in the official PDF
• Fresh-sardine sales to fishermen for bait and unreported tax — facts stated; underlying product records, customer statements, purchase orders, invoices, delivery records, sales journals, and tax returns not reproduced in the official PDF
• Copy to the Santa Rosa Administrator and possible later return adjustment, audit, assessment, refund claim, appeal, or other agency action — recipient stated; no copy, 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/245-0420.pdf

Original ruling text

245.0420

STATE OF CALIFORNIA

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

June 15, 1960

[B]
XXXX --- -----, California

-- - XXXXX

Attention: Mr. [B]
Gentlemen:
Your letter of April 30 concerning your sales tax return of December 1959 has been referred to the legal staff for reply. It is our understanding that you sell fresh sardines to fishermen for use as bait and have not been reporting tax on such sales. Although sales of fresh sardines for human consumption are exempt, sales of sardines or other fish or animal products for use as fish bait are subject to sales tax. You state that an auditor in our Napa office informed you that your sales of fresh bait were not taxable. We are sorry if such information was given to you, inasmuch as it is erroneous. We have taken steps to assure that such erroneous information is not disseminated by our field staff. Very truly yours,

George A. Trigueros
Associate Tax Counsel
GAT:rg
cc:

Santa Rosa - Administrator