Which organizations were treated as consumers rather than retailers for vending-machine items sold for 15 cents or less under section 6359.45?

Plain-English summary

New section 6359.45 treated certain organizations as consumers, not retailers, of tangible personal property sold through vending machines for 15 cents or less.

California read the statutory words "nonprofit, charitable, or education organization" as three independent categories because a comma followed "nonprofit."

The rule therefore covered all nonprofit organizations regardless of purpose, all charitable organizations, and all educational organizations whether operated for profit or not.

What this means for you

Nonprofits, schools, charities, vending operators, and tax advisers

Under the historical provision, organization type and the per-item vending price both mattered. Do not assume "nonprofit" modified only charitable or educational organizations.

Common questions

Q: Did every nonprofit organization qualify regardless of purpose?

A: Yes, under the memorandum's reading.

Q: Did a for-profit educational organization qualify?

A: Yes.

Q: What price limit did the statute use?

A: 15 cents or less per vending-machine sale.

Citations and references

• California Revenue and Taxation Code § 6359.45

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 590.0096
• Original supporting opinion: 590.0096 PDF

Original ruling text

590.0096
State of California

Board of Equalization

Memorandum
R. O. Padilla
Compliance Planning & Evaluation Unit

To:

Date:

September 1, 1983

John Abbott
Tax Counsel

From:

Subject:

Revenue & Taxation Code Section 6359.45
Nonprofit, Charitable, and Education Organizations – Vending Machines

In your memorandum to Legal dated July 27, you quote new Revenue and Taxation Code Section 6359.45, effective August 1, 1983, which provides that a “nonprofit, charitable, or education organization” is a consumer of, and not a retailer of, tangible personal property sold through a vending machine for 15 cents or less. You ask whether the section applies to all nonprofit organizations, or only to nonprofit charitable or education organizations. This is a situation in which the placement of a comma determines the interpretation. Because a comma follows the word “nonprofit” in section 6359.45, “nonprofit” modified “organization” and does not modify either “charitable” or “education.” The words “nonprofit,” “charitable,” and “education” are words in a series, each of which independently modifies “organization.” Our conclusion is that section 6359.45 categorizes as consumers for purposes of the section: (1) All nonprofit organizations, regardless of purpose; (2) All charitable organizations; and (3) All education organizations, whether for profit or not for profit. JA:ss