Was the Cambridge Diet and Nutrition Bar exempt despite its weight-loss-program and nutritional-supplement descriptions?

Plain-English summary

The Cambridge Diet and Nutrition Bar was carob-coated, peanut-flavored, and sold in bar form. Each 41-gram bar provided 150 calories, 11 grams of protein, 17 grams of carbohydrates, and 4 grams of fat.

The wrapper described it as an addition to the Cambridge Weight-Loss Program and a carefully balanced nutritional supplement. The related patents concerned dietary supplements and obesity-treatment methods.

Those claims did not control this product's result. Section 6359 excluded dietary preparations in specified forms such as liquid, powder, granules, tablets, capsules, lozenges, and pills. A bar was not on that list.

The bar's sale and use were therefore exempt. The source contrasted the result with the powdered Cambridge Diet meal, which Board counsel had treated as taxable.

Common questions

Did weight-loss and supplement wording make the bar taxable?

No. The opinion treated bar form as outside the listed excluded forms.

How large was the reviewed bar?

The official letter says 41 grams and lists 150 calories, 11 grams protein, 17 grams carbohydrates, and 4 grams fat.

Did the powdered Cambridge Diet meal receive the same result?

No. The source says the Board had treated that powdered meal as taxable.

Citations and references

• California Revenue and Taxation Code section 6359 (as cited)
• Redacted U.S. Patent Nos. X,XXX,265 and X,XXX,601 concerning dietary supplements and obesity-treatment methods — as cited without complete numbers or patent copies
• Redacted tax director's July 29, 1983 letter requesting guidance for the Cambridge Diet and Nutrition Bar — referenced; not reproduced in the official PDF
• Submitted Cambridge Diet and Nutrition Bar wrapper sample describing weight-loss and nutrition programs, carob coating, peanut flavor, bar form, 41 grams, 150 calories, 11 grams protein, 17 grams carbohydrates, 4 grams fat, and water directions — facts described; wrapper, formula, ingredient specifications, package, bar sample, nutrient analysis, directions, invoices, and sales records not reproduced in the official PDF
• Board's March 17, 1983 Cambridge Diet letter taxing the powdered meal as a dietary supplement — discussed; not reproduced in this official PDF
• Current annotation states an 11-gram bar while the supporting letter states 41 grams — unresolved official-source text conflict; page follows the formal letter body
• Source-printed “bare” form in the conclusion and concatenated signer line “Charles J. GrazianoJoseph Manarolla” — defects preserved in the original text
• Possible later product 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/245-1128-010.pdf

Original ruling text

245.1128.010

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-6493

September 27, 1983

Mr. [K]
Tax Director
--- Road
---, CA XXXXX

S- -- XX XXXXXX

Dear Mr. [K]:

This is in response to your letter of July 29, 1983. You request our opinion as to the correct application of tax to the sale of your product, “Cambridge Diet and Nutrition Bar.” You have enclosed for our review a sample of the product’s wrapper. This wrapper describes the product as “a delicious addition to the Cambridge Weight-Loss Program” and a “carefully balanced nutritional supplement for the Cambridge Nutrition Program.” The product is carob coated, peanut flavored, and is sold in bar form. Each 41 gram bar provides the user with 150 calories, 11 grams protein, 17 grams carbohydrates, and 4 grams of fat. The user is advised to drink a glass of water with the “diet bar.” We note that this product has two patents (U.S. Patents No. X,XXX,265 and No. X,XXX,601), both of which are for inventions concerning dietary supplements and dietary methods for employing said supplements for the treatment of obesity. In your letter, you point out that while the “Cambridge Diet and Nutrition Bar” is part of the Cambridge Weight-Loss Program and can be used in place of one “Cambridge Diet” meal, the diet bar can also be used as a nutritional supplement separate and apart from the Weight-Loss Program. In our March 17, 1983 letter to you, we stated that it is our opinion tax applies to the sale or use of the “Cambridge Diet” meal, because it is a preparation in powdered form which is sold as a dietary supplement. Section 6359 provides that there are exempted from the taxes imposed by this part the gross receipts from the sale of and the storage, use or other consumption in this state of “food products” for human consumption. This section excludes from the term “food products,” however,

Mr. [K]

-2-

September 27, 1983
245.1128.010

“medicines and preparations in liquid, powdered, granular, tablet, capsule, lozenge, and pill form. Since the Cambridge Diet and Nutrition bare is not sold in any of these specified forms, it is outside the exclusion from the exemption from tax under Section 6359 for “food products.” Therefore, it is our opinion that tax does not apply to the sale or use of this product. If you have any further questions, please write this office. Very truly yours,

Charles J. GrazianoJoseph Manarolla
Tax Counsel

CJG:ba