Did bacterial legume inoculants qualify as exempt fertilizer when used to coat seeds before planting?

Plain-English summary

The inoculants consisted of bacteria that formed nodules on legumes and helped the plants obtain nitrogen from the air.

California said that fertilizing function did not make the bacterial cultures fertilizer. Sales of the inoculants for coating and planting seed did not qualify for the historical fertilizer exemption.

Common questions

Did the inoculants help plants obtain nitrogen?

Yes.

Did that make them exempt fertilizer?

No.

What were the products?

Bacterial cultures used as legume seed inoculants.

Citations and references

• Historical Sales and Use Tax Ruling 48

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/510-1000.pdf

Original ruling text

STATE BOARD OF EQUALIZATION
OFFICE CORRESPONDENCE

510.1000
Place:
Date:

To:

San Diego – Auditing

From:

Headquarters – Sales Tax Counsel (GAT)

Re:

Legume Inoculants - Nitrogen

Sacramento, California
July 30, 1959

This is in reply to your inquiry of June 8 concerning the question of whether legume inoculants, such as are manufactured by the N--- Company, ---, Wisconsin, are fertilizers under Ruling 48. These inoculants consist of bacteria which form nodules on legumes which facilitate the plants’ obtaining of nitrogen for nourishment from the air. Although it might be said that the inoculants perform a fertilizing function by making more nitrogen available to the plants, it is our opinion that such bacteria cultures are not fertilizers. Therefore, they do not come within the terms of the exemption provided in Ruling 48.

George A. Trigueros

GAT:tl