Were palm trees sold for landscaping exempt when they produced edible dates or palm hearts?

Plain-English summary

California exempted palm trees sold for landscaping when the trees produced products that ordinarily constituted food for human consumption. Date palms producing edible dates qualified even though the buyer intended to use them for landscaping.

Fruitless varieties and palms producing dates that could not be eaten or were not generally eaten in the local area remained taxable. Based on the requester's information, palms producing edible palm hearts also qualified under the same rule.

Common questions

Did landscaping use make an edible date palm taxable?

No.

Did fruitless date palms qualify?

No.

What about palms producing edible palm hearts?

They qualified based on the facts provided.

Citations and references

• California Revenue and Taxation Code §§ 6051, 6091, and 6358(c)
• Assembly Bill 2798, Statutes 1998, chapter 323
• Market St. Ry. Co. v. California State Board of Equalization (1953) 137 Cal.App.2d 87, 96
• Standard Oil Co. v. State Board of Equalization (1974) 39 Cal.App.3d 765, 769

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/510-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/510-0175.pdf

Original ruling text

510.0175

STATE OF CALIFORNIA

JOHAN KLEHS
First District, Hayward

STATE BOARD OF EQUALIZATION
450 N STREET, SACRAMENTO, CALIFORNIA
(PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0082)
TELEPHONE (916) 324-3828
FAX (916) 323-3387

DEAN F. ANDAL
Second District, Stockton
CLAUDE PARRISH
Third District, Torrance
JOHN CHIANG
Fourth District, Los Angeles

June 11, 1999

KATHLEEN CONNELL
Controller, Sacramento
_______
E. L. SORENSEN, JR.
Executive Director

Mr. D--- L--- Y---g
W. D. Y--- & Sons
XXXXX --- Street
---, CA XXXXX
Re:

SS --- XX-XXXXXX
Date Palms and Palm Trees
Sold for Landscaping

Dear Mr. Y---:
Your letter of January 25, 1999, has been referred to the Legal Division for a response. You indicate that you sell date palms and other varieties of palm trees for landscaping purposes. You ask if, in the wake of the recent amendments to Revenue and Taxation Code Section 6358, sales of such trees are now exempt from tax. OPINION A.

Sales and Use Tax Generally.

In California, except where specifically exempted by statute, Revenue and Taxation Code Section 6051 imposes a sales tax, computed as a percentage of gross receipts, upon all retailers for the privilege of selling tangible personal property at retail in this state. (Unless otherwise stated, all statutory references are to the Revenue and Taxation Code.) “[I]t shall be presumed that all gross receipts are subject to tax until the contrary is established. The burden of proving that a sale of tangible personal property is not a sale at retail is upon the person who makes the sale ...” (§ 6091.) “Exemptions from taxation must be found in the statute.” (Market St. Ry. Co. v. Cal. St. Bd. of Equal. (1953) 137 Cal.App.2d 87, 96 [290 P.2d 201.]) “The taxpayer has the burden of showing that he clearly comes within the exemption.” (Standard Oil Co. v. St. Bd. of Equalization (1974) 39 Cal.App.3d 765, 769 [114 Cal.Rptr. 571].) B.

Sales of Palm Trees and Date Palms.

As you know, prior to the enactment of Section 5 of AB 2798 (Stats. 1998, Ch. 323), the exemption from sales and use tax for sales of plants the products of which ordinarily constitute food for human consumption was limited to non-annual plants. The amendment to section 6358(c)

Mr. D--- L--- Y---

-2-

June 11, 1999
510.0175

removed that restriction. Consequently, sales of qualifying perennial, as well as annual, plants are, operative January 1, 1999, exempt from tax. We have not examined the phrase “the products of which constitute food for human consumption” in the context of plants. In the case of animals, however, the exemption granted in section 6358(b) uses the same terminology. In that context, we have previously determined that the sale of a qualified animal is not subject to tax, even if the animal is being sold for some other purpose than as food for human consumption - e.g., sales to educational institutions for research. (Annot. 110.0060 (3/5/70). Sales and Use Tax Annotations are excerpts from previous Board staff opinion letters and serve as guides to staff positions.) Because the Legislature used the same language regarding plants, we conclude that it intended that the same analysis apply. Accordingly, if the plant being sold is of a kind the products of which ordinarily constitute food for human consumption, then its sale for landscaping purposes would come within the exemption under the above analysis. The next question, then, is whether or not the products of the trees about which you inquire “ordinarily” constitute food for human consumption. In determining whether or not those products qualify, they must be in fact generally used as food for human consumption in the area where they happen to be located. (See, e.g., Annot. 110.0005 (4/18/73).) Dates are a common food for human consumption; sales of date palms for landscaping purposes would be exempt from tax under AB 2798 but only if such trees produce edible dates. If they are a fruitless variety or the dates they produce either cannot be eaten or are not generally eaten in the area in which they happen to be located, their sales remain subject to tax. Regarding other kinds of palms, you indicate that they will produce palm hearts which “are available in any grocery store” and “are generally used in salads or in appetizers.” Based on the information you supply, it appears that palm hearts “ordinarily constitute food for human consumption” with the result that sales of palm trees which produce edible palm hearts, with the same provisos as to date palms, are, since the enactment of AB 2798, not subject to tax even if sold for non-food purposes such as landscaping. I hope the above discussion has answered your question. If you need anything further, please do not hesitate to write again. Sincerely,

John L. Waid
Senior Tax Counsel
JLW:sr
cc:

Mr. Jeffrey D. Navalta (MIC:40)