Were retail sales of microbes used to consume toxic hydrocarbon chains exempt from California sales tax?

Plain-English summary

A company sold microbes that consumed toxic hydrocarbon chains to control pollution and asked whether its California retail sales were taxable.

The Board said the sales were taxable. The microbes did not fit the described exemption for animal life whose product ordinarily constitutes human food or the exemption for seeds and plants producing human food. California also had no exemption for products merely because they aided pollution control.

Citations and references

• The supporting opinion cites no statute, regulation, case, or prior ruling by number.
• June 25, 1991 letter, received Aug. 8, asking about California sales tax on pollution-control microbes sold at retail — letter and supporting records not reproduced in the official PDF
• Microbes or bacterial products that consume toxic hydrocarbon chains for pollution control, with some products to be sold at retail — facts supplied; organism and product identities, labels, technical data, environmental use, orders, invoices, customers, and sales records not reproduced in the official PDF
• The opinion prints a category for “seeds and animal plants” whose product ordinarily constitutes human food, while Official Annotation 295.0648 says the microbes are not feed for qualifying animal life — unresolved source-versus-annotation description; neither format supplies a statutory citation
• Official Annotation 295.0648's in-state retail sale, toxic-hydrocarbon-consuming microbes, human-food animal-life exclusion, animal-feed exclusion, no pollution-control exemption, and Aug. 16, 1991 date — annotation omits the June 25/Aug. 8 provenance, future-sales wording, absence of numbered legal authority, missing product and transaction records, and later outcome and supplies no additional sale record
• Possible product sale or use, return filing, audit, assessment, exemption claim, refund claim, appeal, later statutory change, or other agency action — not 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/295-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/295-0648.pdf

Original ruling text

295.0648

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
(916) 445-3723

August 16, 1991

Mr. A--- R. C. R---, CPA
Certified Public Accountant
P. O. Box XXX
---, NJ XXXXX
Dear Mr. R---:
This is in response to your letter of June 25, 1991, which reached this office on August 8, 1991. We understand that you represent a company that has been selling microbes that consume toxic hydrocarbon chains in order to control pollution. Some of these bacterial products will be sold at the retail level. You inquire as to whether these retail sales will be subject to California sales tax. The transactions in question are subject to sales tax in this state. California does have an exemption for sales of animal life of a kind the product of which ordinarily constitutes food for human consumption; that is food animals. We also have an exemption for sales of seeds and animal plants, the product of which ordinarily constitutes food for human consumption. Neither of these exemptions are applicable to the sale of microbes. Additionally, there is no exemption for products that aid in pollution control. Very truly yours,

Gary J. Jugum
Assistant Chief Counsel

GJJ:sr