Was Power Bar exempt even though it was fortified with vitamins and minerals?

Plain-English summary

Tax counsel reviewed packaging for Power Bar and Exceed.

Power Bar appeared to be a candy bar or cookie fortified with vitamins and minerals. Counsel classified that food form as exempt under Regulation 1602. The added vitamins and minerals did not turn the bar into a taxable listed-form supplement.

Exceed received the opposite result. It was a powder mixed with water to make a drink for rapid replacement of energy, fluid, and electrolytes. Its package described it as a dietary adjunct, so its sales were taxable under Regulation 1602(a)(5).

Common questions

Did vitamin and mineral fortification make Power Bar taxable?

No. The source treated the product as a candy bar or cookie and exempted it.

Why was Exceed taxed in the same letter?

Exceed was sold as a powder and described as a dietary adjunct for replacing energy, fluid, and electrolytes.

Does this classify every modern energy bar?

No. The conclusion applies to the Power Bar packaging reviewed in 1990.

Citations and references

• California Sales and Use Tax Regulation 1602 (including subdivision (a)(5)) (as cited)
• Redacted seller's April 17, 1990 request for clarification concerning Power Bar and Exceed — request referenced but not reproduced in the official PDF
• Power Bar and Exceed packaging supplied with the request — attachments referenced and quoted in part but not reproduced in the official PDF
• Power Bar product evidence, including candy-bar-or-cookie form and vitamin and mineral fortification — facts described; complete packaging, label, ingredients, formulation, nutrition data, samples, tests, invoices, and sales records not reproduced in the official PDF
• Exceed product evidence, including powder form, water-mixing directions, energy/fluid/electrolyte replacement claim, and dietary-adjunct label — facts described; complete packaging, label, ingredients, formulation, nutrition data, samples, tests, invoices, and sales records not reproduced in the official PDF
• Sales and Use Tax Regulation 1602 enclosure — stated as enclosed; enclosure copy not reproduced in the official PDF
• Possible later product sale, label or formulation change, 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/245-1268-300.pdf

Original ruling text

245.1268.300

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

May 30, 1990

Dear [X]:
I am writing in response to your April 17, 1990 request for clarification as to the applicability of sales and use tax to “Power Bar” and “Exceed.” You enclosed packaging from both products. “Power Bar” appears to be a candy bar or cookie fortified with vitamins and minerals. As such, it is a tax exempt food product under Sales and Use Tax Regulation 1602 (enclosed). “Exceed” appears to be a powder which, when mixed with water, constitutes a drink “for rapid replacement of energy, fluid and electrolytes.” As such, sales of “Exceed” are subject to tax as a product in powdered form “which is described on its package or label as a ... dietary adjunct...” (Reg. 1602(a)(5).) Please feel free to contact us again if you have further questions. Sincerely,

Stella Levy
Tax Counsel