Could a farm labor center be a California sales-tax retailer of meals even though it did not qualify as a retail establishment under the federal Fair Labor Standards Act?

Plain-English summary

A federal Wage-Hour Administrator opinion, based on the cited Fair Labor Standards Act provisions and Mitchell v. Anderson, concluded that organizations such as Lathrop Farm Labor Center did not qualify as federal retail establishments for purposes of a labor-law exemption.

California tax counsel said that federal classification did not answer the sales-tax question. The federal phrase "retail establishment" was not synonymous with "retailer" in the California Revenue and Taxation Code.

Accordingly, even if the center was not a retail establishment under the cited federal provisions, it was still a retailer of its meal sales under California section 6015.

Common questions

Did federal labor-law status determine California sales-tax status?

No. The letter treated the terms in the two statutes as different.

What California provision controlled the retailer conclusion?

Revenue and Taxation Code section 6015, as cited in the source.

Citations and references

• California Revenue and Taxation Code section 6015 (as cited)
• Fair Labor Standards Act sections 13(a)(2) and 13(a)(20), 29 U.S.C. section 213(a)(2) and (a)(20) (as cited)
• Mitchell v. Anderson, 235 F.2d 638 (as cited)
• Wage-Hour Administrator opinion of November 7, 1961 (as cited)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/550-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/550-1240.pdf

Original ruling text

550.1240

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
December 11, 1964
REDACTED TEXT
Dear Mr. REDACTED TEXT,
Your letter of November 30, 1964, to Mr. Bernard Doyle, District Tax Administrator,
Sacramento, has been referred to this office for reply.
We have reviewed sections 13(a)(2) and 13(a)(20) of the Fair Labor Standards Act (29
U.S.C.A. sec. 213(a)(2), 213(a)(20)), the opinion of Wage-Hour Administrator Clarence T.
Lundquist of November 7, 1961, and the case of Mitchell v. Anderson, 235 F.2d 638, on which it
was based.
The Wage-Hour Administrator concluded that such organizations as Lathrop Farm Labor
Center, Inc., do not qualify as “retail establishments” (as that term is used in the act) with respect to
their sales of meals for the purposes of exemption from the provisions of the Fair Labor Standards
Act.
In our opinion, the term “retail establishments,” as used in the act, is not synonymous with
“retailer” as used in the California Revenue and Taxation Code. Therefore, although Lathrop Farm
Labor Center, Inc., may not be a “retail establishment” under sections 13(a)(2) and 13(a)(20) of the
Fair Labor Standards Act (29 U.S.C.A. sec. 213(a)(2), 213(a)(20)), Lathrop Farm Labor Center,
Inc., is a “retailer” with respect to its sales of meals under section 6015 of the Revenue and Taxation
Code.
Very truly yours,
George A. Trigueros
Associate Tax Counsel
GAT:ls
cc:

Sacramento – District Administrator