Was Pro-Life Protein Formula 96 exempt when the soy protein powder was mixed into drinks and ordinary foods?

Plain-English summary

Pro-Life Protein Formula 96 was described as a complete vegetable protein derived from soybean and combined with lecithin, papain, methionine, and B-12. The label called it a scientifically balanced combination of nutrients with a higher protein-efficiency ratio than ordinary soy protein.

Users were directed to add the powder to milk, juice, or other beverages. It could also be mixed into vegetables, potatoes, meatloaf, hamburger patties, flour, pancakes, omelets, and sandwich spreads.

Regulation 1602(a)(5) treated specially mixed or compounded high-nutrition protein supplements as taxable rather than exempt food.

Board counsel classified Pro-Life Protein Formula 96 as that kind of protein supplement, so tax applied to its sales.

Common questions

Did mixing the powder into ordinary foods make it exempt?

No. The source classified the product itself as a protein supplement.

What label facts supported that result?

The label emphasized its scientifically balanced nutrients, vegetable protein, and higher protein-efficiency ratio.

Was the product ordinary soy protein?

No. The source described it as a compounded formula with several additional ingredients.

Citations and references

• California Sales and Use Tax Regulation 1602(a)(5) (as cited)
• Redacted seller's September 22, 1977 letter to W. D. Dunn requesting an opinion on Pro-Life Protein Formula 96 — request referenced but not reproduced in the official PDF
• Pro-Life Protein Formula 96 label describing ingredients, vegetable-protein source, protein-efficiency claim, and directions for beverages and staple foods — label quoted in part but not reproduced in the official PDF
• Pro-Life Protein Formula 96 product evidence — described ingredients, nutrition claims, and use directions supplied; complete label, formula, ingredient specifications, nutrient analysis, package, samples, tests, invoices, advertising, and sales records 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/245-1270.pdf

Original ruling text

245.1270

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
916-445-2488

December 7, 1977

[X]

Dear Mr. [X]:
This is in reply to your letter of September 22, 1977 to Mr. W. D. Dunn, which has been referred to the undersigned for reply. You have requested our opinion on whether Pro-Life Protein Formula 96 is an exempt “food product” under Regulation 1602. The label describes this product as “Pro-Life Protein Formula 96 with lecithin, papain, methionine and double absorbtion B-12; a whole and complete vegetable protein derived entirely from soybean.” The label further states that “Pro-Life Protein is a scientifically balanced combination of…nutrients which has a higher PER….than ordinary soy protein.” The suggested use of this product is to “add two heaping tablespoons of the protein to a glass (8 oz.) of milk, juice, or other beverage. Shake in a closed container or mix in a blender.” It can also be “mix(ed) into staple foods when cooking such as vegetables, potatoes, meatloaf, hamburger patties, etc., mixed readily with flour for use in baking, pancakes, omelettes, and mixed into sandwich spreads.” Sales and Use Tax Regulation 1602(a)(5) provides in part that: “(5) ‘Food Products’ do not include any product for human consumption in liquid powdered, granular, tablet, capsule, lozenge, or pill form…(b) which is prescribed or designed to remedy specific dietary deficiencies or to increase or decrease generally one or more of the following areas of human nutrition: 1. 2. 3. 4.

Vitamins
Proteins
Minerals
Caloric Intake

[X]

-2-

December 7, 1977
245.1270

Regulation 1602(a)(5) also provides that:
“In determining whether a product falls within category (B), it is important whether the manufacturer has specially mixed or compounded ingredients for the purpose of providing a high nutritional source. For example, protein supplements and vitamin pills are taxable as food supplements.” We would consider “Pro-Life Protein” to be a protein supplement as they are described in Sales and Use Tax Regulation 1602(a)(5). As such, it would not be considered an exempt “food product” and tax would apply to the sale of this item. If you have further questions concerning this matter, please write this office. Very truly yours,

Mary C. Armstrong
Legal Counsel
MCA:jw