Was powdered, milk-free Isomil exempt when it could supplement breastfeeding or provide an infant's only nutrients?

Plain-English summary

Counsel understood Isomil to be a powdered, milk-free baby food. It could supplement breastfeeding or serve as the only nutrient source for an infant unable to ingest milk or dairy products.

The opinion classified Isomil as an exempt food product. It noted that Isomil contained corn syrup solids and sucrose and that other similar baby-food products had also been treated as exempt.

Its sales were therefore not subject to tax.

Common questions

Did powdered form make Isomil taxable?

No. The source treated it as exempt baby food.

Could Isomil still qualify when used as the infant's only nutrition?

Yes. That possible use was part of the facts stated in the opinion.

What similar authority did counsel mention?

The letter cited Annotation 245.0040 for other similar baby-food products.

Citations and references

• California Revenue and Taxation Code sections 6051 and 6359 (as cited)
• California Sales and Use Tax Regulation 1602 (including subdivision (a)(1)) (as cited)
• California Business Taxes Law Guide Annotation 245.0040 and prior treatment of similar baby-food products — as cited without separate supporting opinions
• Redacted requester's undated letter asking whether Isomil sales were taxable — request referenced but not reproduced in the official PDF
• Isomil product evidence, including counsel's understanding of powder form, milk-free status, infant uses, corn-syrup solids, and sucrose — facts supplied; complete label, formulation, ingredients, nutrition data, directions, package, samples, tests, invoices, medical-use records, 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/245-1489.pdf

Original ruling text

245.1489

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
(916) 445-8485

January 4, 1989

Ms. [L]
XXXX – XX ---.
--- ---, CA XXXXX
Dear Mrs. [L]:
This is in response to your letter to the Board’s Legal Unit. You have requested an opinion concerning whether the sale of ISOMIL is taxable. It is our understanding that ISOMIL is a powdered, milk-free baby food. ISOMIL can be used to supplement breast feeding or as the only source of nutrients if the infant is unable to ingest milk or dairy products. Except where the sales are specifically exempted by statute, sales tax applies to the gross receipts of retailers for all retail sales of tangible personal property in this state. (Revenue and Taxation Code § 6051). The retailer, in turn, charges the consumer sales tax reimbursement. Revenue and Taxation Code Section 6359 and Sales and Use Tax Regulation 1602(a)(1) provide that tax does not apply to sales of food products for human consumption, with certain exceptions. Regulation 1602(a)(1) provides that “food products” include sugar and sugar products and syrups (for use as an ingredient of, or upon, food products as defined herein). It is our opinion that ISOMIL is an exempt food product and its sale is not subject to tax. We note, ISOMIL’s ingredients include corn syrup solids and sucrose. Additionally, we note that we have considered other similar baby food products to be exempt (see Business Taxes Law Guide Annotation 245.0040). I have enclosed Regulation 1602 (Food Products) for your information. If you have any further questions, please feel free to write again. Very truly yours,

E. L. Sorensen, Jr.
Senior Tax Counsel
ELS:ss
Enclosure