Were vitamin pills taxable when an employee organization included them as part of an otherwise exempt meal sold to employees?

Plain-English summary

An employee organization asked about vitamin pills sold with meals to employees.

The letter said the pills were not separately taxable when they were actually sold as part of a meal that qualified for the section 6363 employee-meal exemption explained in Ruling 53(F).

The opposite applied when pills were sold to employees or others outside a meal. Section 6359 expressly excluded vitamin pills from the definition of food products, so those separate sales were taxable.

Common questions

Did every vitamin-pill sale qualify as food?

No. The source said section 6359 expressly excluded vitamin pills from food products.

Why were pills included with an exempt meal not taxed separately?

Because they were sold as part of the qualifying meal under the facts assumed.

What if the employee meal itself was not exempt?

The letter's nontaxable conclusion would not apply; it expressly required the meal to qualify under section 6363.

Citations and references

• California Revenue and Taxation Code section 6363 (as cited)
• California Revenue and Taxation Code section 6359 (as cited)
• Sales and use tax Ruling 53(F) (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/550-1700.pdf

Original ruling text

550.1700

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
December 4, 1951
Attention:
Gentlemen:
In answer to your letter of November 5 we advise that if you sell vitamin pills as part of meals sold to employees that sales tax will not apply, provided the sale of the meals qualifies for the exemption for which provisions is made in Section 6363 of the Sales and Use Tax Law and more fully explained in Ruling 53(F). It is assumed that as an employee organization you sell meals to employees which thus fall within the exemption. If, however, you sell vitamin pills to your employees or others not as a part of meals, the sale tax will apply since vitamin pills are expressly excluded from the definition of food products in Section 6359 of the Sales and Use Tax Law. Very truly yours, E. H. Stetson Tax Counsel EHS:ph