Did inspected horse meat qualify as exempt food merely because it was suitable for people to eat?

Plain-English summary

Horse meat and horse-meat products were not automatically treated as exempt food for human consumption. Because those products were mostly purchased as animal food, a seller claiming the exemption had to keep reasonable evidence that the particular property was actually purchased for people to eat.

Inspection and suitability for human consumption were not enough by themselves. The letter focused on actual use and said exemption claims had to be supported by proper proof.

Common questions

Was inspected horse meat necessarily exempt?

No. The letter said inspection and suitability for human consumption did not establish the exemption unless the product would actually be used that way.

Who had to support the exemption?

The person claiming exempt sales on a tax return needed reasonable evidence of human-consumption purchases.

Why did the letter require that proof?

It reasoned that horse-meat products were ordinarily bought for animal consumption and that tax exemptions are strictly construed against the claimant.

Citations and references

• California Sales and Use Tax Law — food-for-human-consumption exemption and tax-return deduction substantiation discussed without section numbers
• Basic principle that tax exemptions are strictly construed against claimants and must be supported by proper proof — stated without a case or other formal citation
• Redacted correspondent's letter postmarked November 14 concerning horse meat and horse-meat products — referenced; not reproduced in the official PDF
• Redacted Horsemeat with gravy and other horse-meat products — product and usual animal-food purchase pattern described; formula, ingredient specifications, labels, packages, inspection record, invoices, purchaser statements, and human-consumption evidence not reproduced in the official PDF
• Claimed exempt-sale deductions on tax returns and supporting proof — recordkeeping duty stated; no returns, deduction schedules, audit workpapers, or supporting records reproduced in the official PDF
• Copy to Santa Rosa Auditing — copy notation present; copy, audit record, and any follow-up not reproduced in the official PDF
• Possible later 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/245-0520.pdf

Original ruling text

245.0520

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

November 25, 1953

[X]
Your letter postmarked
November 14
Dear Mr. [X]:
It is our opinion that horse meat and horse meat products such as [X] Horsemeat with gravy are not properly regarded as food products for human consumption within the meaning of the Sales and Use Tax Law in the absence of reasonable evidence that the product is actually purchased for food for human consumption. Inasmuch as horse meat and horse meat products are for the most part purchased for food for animal consumption, we believe it is incumbent upon those claiming that sales of this product are exempt as sales of food for human consumption to support deductions taken on their tax returns with reasonable evidence that the property claimed as exempt was in fact purchased for human consumption. This is consistent with the basic principle that exemptions from taxation are construed strictly against the persons claiming the exemption and that exemptions must be supported by proper proof, which is true in the case of any exemption from sales tax that is claimed on a tax return. The fact that the particular horse meat is inspected and suitable for human consumption does not make it a food product for human consumption within the meaning of the California Sales and Use Tax Law unless the product will actually be used in that manner. Yours very truly,

W. W. Mangels
Assistant Counsel
WWM:ja
cc:

Santa Rosa -Auditing