How did California tax a state institution's sales of food, feed, animal products, scrap, containers, blood, livestock, and transfers to other state agencies?

Plain-English summary

A redacted California state institution asked about sales to purchasers unable to provide valid resale certificates. Tax Counsel E. H. Stetson treated those transactions as retail sales, taxable unless a specific Sales and Use Tax Law exemption applied.

Food for human consumption was exempt. Feed for animals whose products ordinarily were human food, or property bought for resale in the regular course of business, could qualify under the former rules. Bone, fat, suet, meat scraps, stillborn or naturally dead animals, offal, garbage and livestock depended on whether their actual use met human-food, food-producing-animal feed or resale conditions.

Junk, rags, paper, bottles, cans, scrap metal, barrels, boxes and nonreturnable containers generally were taxable. The stated exception covered qualifying nonreturnable containers for goods the purchaser would sell. A business selling food exclusively, though not otherwise required to hold a permit, could provide a resale certificate for those containers.

The original 1950 letter tentatively called malaria blood for inoculation taxable, admitted staff might not fully understand its technical use, and distinguished human blood or plasma for transfusions. A later DJH note expressly says that conclusion became obsolete because of section 6369, effective January 1, 1962. The note does not date its own insertion.

Surplus livestock sold to farmers depended on former Ruling 47's exemption requirements. Surplus livestock transferred from one California state agency to another did not constitute a sale under the Sales and Use Tax Law.

The source says copies of former Rulings 47, 49 and 52 were enclosed, but CDTFA's two-page PDF includes none. It supplies no buyer, certificate, product, intended-use, invoice, tax computation, interagency transfer record or outcome.

Source posture

The live 415.0120 annotation, in the 2026 revision of the Business Taxes Law Guide, retains only the conclusion that transfers between state agencies are not sales because only one person is involved. The supporting opinion says the agency transfer was not a sale but does not itself print the live page's only one person explanation. The live page omits every product category, resale-certificate setting, former rulings and missing enclosures, blood/plasma distinction and obsolete-rule note, livestock-to-farmer condition, missing records and absent outcome.

CDTFA's Annotated Legal Opinions collection says statutory law controls over an inconsistent annotation. The official two-page PDF has a clean native text layer and one small page-1 image, so no OCR was required. Duplicate direct downloads and extractions matched, and the original-text tail remains byte-identical to the committed tail and fresh extraction after removing only terminal extractor whitespace.

What this means for you

State institutions and tax professionals

Classify each product and document its intended use rather than assuming all public-agency dispositions share one result. The former rulings and return practices are historical, and the blood rule is expressly obsolete. Separately identify true transfers within the same state government and confirm the current statutory basis.

Common questions

Q: Were all sales by the state institution exempt?

A: No. Retail sales were taxable unless a specific food, animal-feed, resale or container exemption applied.

Q: Were transfers to another California state agency sales?

A: No for the described surplus-livestock transfer, according to the letter. The live annotation supplies the broader one-person explanation.

Q: Is the letter's malaria-blood conclusion current?

A: No. The source itself marks it obsolete after section 6369 became effective January 1, 1962.

Q: Could an exclusively food-selling business provide a resale certificate for containers?

A: Yes under the historical opinion, for qualifying nonreturnable containers of goods it sold, even if it otherwise did not need a permit.

Q: Were the former rulings and certificates included?

A: No. The three stated ruling enclosures, purchaser certificates and intended-use evidence are absent.

Citations and references

• Former Sales and Use Tax Rulings 47 (Animals and Feed), 49 (Containers) and 52 (Food Products) — described; stated enclosures absent
• California Revenue and Taxation Code section 6369, effective January 1, 1962 — later note rendering the malaria-blood conclusion obsolete
• September 20 request; buyers; certificates; products, quantities and intended uses; invoices; livestock and interagency records; tax calculations; returns; audits; and outcomes — absent

Verbatim support

From the official November 2, 1950 Tax Counsel opinion and later note:

The tax will apply with respect to all such sales except those that are specifically exempted under the Sales and Use Tax Law.

You mention that surplus livestock may be sold [by one State agency] to other State agencies which, as you know, does not constitute a “sale” within the meaning of the Sales and Use Tax Law.

*Now obsolete due to Section 6369, effective January 1, 1962. DJH.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 415.0120
• Original supporting opinion: 415.0120 PDF

Original ruling text

415.0120

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

November 2, 1950

S--- S--- H--P.O. Box XXXX
---, California
Attention:

Mr. L--- L. C--Business Manager

E. H. Stetson
Tax Counsel
In your letter of September 20 you inquire concerning the applicability of the State sales tax to your sales of various items to purchasers who are unable to furnish you with valid resale certificates which sales, accordingly, would be deemed to be retail sales. The tax will apply with respect to all such sales except those that are specifically exempted under the Sales and Use Tax Law. Sales of food products for human consumption are, of course, exempt. Also exempt are sales of feed for any form of animal life of a kind the products of which ordinarily constitute food for human consumption or are to be resold in the regular course of business. These two exemptions are more fully explained in the enclosed copies of Sales and Use Tax Rulings 52, Food Products, and 47, Animals and Feed. Thus, your sales of bone, fat, suet, scraps of meat, etc, are taxable unless purchased for a purpose which would bring the sales within one or the other of the aforementioned exemptions. The sale of still-born or natural death animals, or the offal from slaughtered animals, would be subject to tax unless for use as feed under the conditions specified in Ruling 47 for exemption. Sales of junk, rags, paper, bottles, cans, scrap metal, barrels, boxes, and non-returnable containers are taxable unless purchased for use as non-returnable containers of goods sold by the purchaser of the items mentioned. If such purchaser is engaged in selling food products exclusively so as not to be required to hold a seller’s permit, he may nevertheless give you a resale certificate for such containers. Enclosed is a copy of Ruling 49 dealing with the taxability of sales of containers. The sale of garbage would be exempt if sold for use as feed for hogs or other food producing animals, to the extent indicated in Ruling 47.

S--- S--- H---

-2-

November 2, 1950
415.0120

The sale of Malaria blood for inoculation would appear to be taxable. We may not fully understand the technical details of the use of this blood, but in general the tax applies to the sale of any form of medication, whether administered through inoculation or otherwise, although we have held that the tax does not apply to the sale of human blood or blood plasma for use in transfusions. * The sale of livestock surplus to your needs sold to farmers would be taxable or not depending upon whether the requirements of Ruling 47 for exemption are fulfilled. You mention that surplus livestock may be sold [by one State agency] to other State agencies which, as you know, does not constitute a “sale” within the meaning of the Sales and Use Tax Law.

EHS:ph
cc: Mr. H. B. H---

*Now obsolete due to Section 6369, effective January 1, 1962. DJH.