Were spirulina powder, granules, and tablets exempt when their labels did not call them supplements or claim medicinal or dietary benefits?

Plain-English summary

The seller offered spirulina—a type of seaweed—in powder, granule, and tablet form.

Board counsel said spirulina qualified as exempt food under Regulation 1602 when it was not labeled as a food supplement or dietary adjunct and did not make medicinal or dietary-benefit claims. Spirulina presented as a dietary supplement would instead be taxable.

The mere presence of nutritional information on a label did not, by itself, make the product a dietary supplement.

Counsel examined all three submitted labels and concluded that each product qualified as exempt food.

Common questions

Did tablet form automatically make spirulina taxable?

No. The source exempted the submitted powder, granule, and tablet products based on their labels and claims.

Did nutrition facts make the products dietary supplements?

No. The memorandum expressly said nutritional information alone did not produce that classification.

What would have changed the result?

Labeling the product as a food supplement or dietary adjunct, or making the medicinal or dietary-benefit claims described in the source.

Citations and references

• California Sales and Use Tax Regulation 1602 (as cited)
• Jennifer Lukavic's April 3, 1989 memorandum to Audit Evaluation and Planning requesting guidance — memorandum referenced but not reproduced in the official PDF
• Board letters dated April 27, 1981 and March 21, 1983 concerning spirulina — cited and stated as enclosed, but neither letter is reproduced in the official PDF
• Unidentified kelp annotations and the then-current exempt-and-taxable treatment of powdered kelp — positions referenced without annotation numbers, dates, text, or supporting records
• Three spirulina labels submitted for products in powder, granule, and tablet form — labels examined but not reproduced in the official PDF
• Spirulina product and review evidence — seaweed identity, forms, label conditions, and outcomes described; complete labels, packages, ingredients, formulations, nutrition data, promotional materials, samples, tests, invoices, review workpapers, and sales records not reproduced in the official PDF
• 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/245-1295.pdf

Original ruling text

State of California

Board of Equalization
Legal Division (MIC:82)

Memorandum
245.1295
To:

Ms. Jennifer Lukavic
San Rafael Branch Office Supervisor

From:

Mary C. Armstrong
Legal Office

Subject:

Spirulina Products - [X]

Date:

June 1, 1989

This is in response to your memorandum of April 3, 1989 to Audit Evaluation and Planning. You have requested our guidance regarding the correct application of tax to [X] Spirulina which is sold in powder, granule and tablet form. You note that spirulina is a type of seaweed and that currently powdered kelp is considered both an exempt and taxable food product. We have previously determined that spirulina does qualify as an exempt food product under Regulation 1602 provided it is not labeled as a food supplement or dietary adjunct and does not purport to make any claims concerning medicinal or dietary benefits (see letters dated April 27, 1981 and March 21, 1983, copies enclosed). Like the annotations regarding kelp, spirulina which is labeled as a dietary supplement would not be considered an exempt “food product” under Regulation 1602. The fact that the nutritional information is included on the label does not result in a finding that the product is a dietary supplement. We have examined the three labels submitted. We are of the opinion that all three qualify as exempt food products under Regulation 1602.

MCA:cl
Enclosures
cc:

Audit Evaluation and Planning (---)