Is a chemical used to keep apples from ripening and spoiling exempt from sales tax as a food preservative?

Plain-English summary

Sun Orchard Fruit Company cleans, sorts, packages, and stores apples bought from farmers before selling them to grocery stores. Before cleaning and sorting, the apples are exposed to SmartFresh, a gas whose active ingredient (1-methylcyclopropene, or "1-MCP") blocks the plant hormone ethylene from triggering ripening. In practical terms, it locks the apple's ripening "receptors" so they can't respond to ethylene, letting the fruit stay firm and saleable for months longer than it otherwise would.

New York exempts "food and food products" sold for human consumption, and its regulations specifically list "food preservatives" within that exemption — even though neither the statute nor the regulations define the term. The Department turned to a standard dictionary definition of "preservative" (an additive used to protect against decay, discoloration, or spoilage) and found 1-MCP fits squarely: it's applied specifically to protect the apples against decay and spoilage during and after storage. Because it functions as a food preservative used on food destined for human consumption, Sun Orchard's purchases of 1-MCP are exempt from sales tax.

What this means for you

Fruit and produce wholesalers, packers, and processors

Chemicals or gases you apply specifically to extend the shelf life or prevent spoilage of food products you're preparing for sale can qualify as exempt "food preservatives," even if the substance isn't itself something a consumer would recognize as a traditional preservative like salt or vinegar — what matters is its actual protective function against decay, discoloration, or spoilage.

Agricultural and food-processing businesses generally

This ruling is a useful reminder that New York's food exemption reaches beyond the food itself to certain processing inputs — check whether a chemical, additive, or treatment you use fits the "protect against decay, discoloration, or spoilage" definition before assuming it's taxable equipment or supplies.

Accountants and tax professionals

Because "food preservative" isn't statutorily defined, the Department's approach here (falling back to an ordinary dictionary definition) is a useful template for classifying other undefined exemption terms — document the substance's actual function, not just its trade name or chemical classification.

Common questions

Q: Is a chemical used to slow fruit ripening exempt from sales tax?
A: Yes, when it functions as a food preservative (protecting against decay, discoloration, or spoilage) and is applied to food sold for human consumption.

Q: Does the exemption depend on the chemical being a traditional additive like salt or citric acid?
A: No — the Department looked at the substance's actual protective function, not its chemical category, in classifying it as an exempt preservative.

Q: Would this exemption apply to a chemical used on non-food items?
A: No. The food-and-food-products exemption is limited to items sold for human consumption; a similar chemical used for a non-food purpose wouldn't qualify under this provision.

Q: Can another fruit or produce company rely on this Advisory Opinion?
A: No. It binds the Department only for the petitioner and the specific chemical and use described.

Citations and references

Statutes and regulations:

• Tax Law § 1105(a) (imposition of sales tax)
• Tax Law § 1115(a)(1) (food and food products exemption)
• 20 NYCRR 528.2(a) (food and food products, including food preservatives)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2006.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a06_3s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-06(3)S
Sales Tax
January 18, 2006

Office of Tax Policy Analysis
Technical Services Division
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S050225A

On February 25, 2005, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Sun Orchard Fruit Company, Inc., 2087 Transit Road, Burt, New York,
14028.
The issue raised by Petitioner, Sun Orchard Fruit Company, Inc., is whether purchases of
the chemical described below by a fruit wholesaler are subject to sales tax.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner is in the business of cleaning, sorting, packaging, and storing apples that it then
sells to various grocery stores. Petitioner purchases apples from various farmers, then cleans,
sorts, packages and stores them for sale. After apples are unloaded at Petitioner's facility and
prior to cleaning and sorting them, the apples are treated with a gaseous chemical. The chemical,
commercially known as SmartFresh™, is used to stop the natural tendency of the apples to
continue to ripen and spoil.
The active ingredient in SmartFresh is a gas known as 1-methylcyclopropene (1-MCP).
Petitioner quotes Dr. Sylvia Blankenship, one of the researchers involved in the discovery of
1-MCP, as follows:
Ethylene is a naturally occurring plant hormone that causes some fruits to ripen.
Unlike other plant hormones, it is a gas. In normal fruit ripening, ethylene is produced in
the fruit, and it then attaches to a receptor molecule. Ethylene attaching to the receptor is
much like a key fitting in a lock, with ethylene as the key, and the receptor as the lock.
When ethylene attaches to the receptor, it is like the lock turns and a door opens. A
cascade of events then takes place, such as the fruit begins to soften, produce volatiles,
and change color. Another gas, 1-methylcyclopropene (1-MCP), is able to attach to the
ethylene receptor. It also can act as a key that goes into the lock, but it is unable to turn
the lock and open the door. When the 1-MCP key is in the lock, it is not possible for the
ethylene key to go in the lock. It is in this way that 1-MCP can act as an ethylene
inhibitor for fruit ripening.
A typical postharvest scenario might be to enclose a plant product, such as apples,
in an airtight container/room. 1-MCP gas would be released into the air and penetrate the
product. After a short period of time (hours), the product would be returned to air. The
product would then continue on the postharvest route to the buyer. In apples, it appears
that treatment with 1-MCP permanently blocks the ethylene receptors. (S Blankenship,
Potential MCP Revolution. 16th Annual Post harvest Conference, Yakima, WA. 2000)

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TSB-A-06(3)S
Sales Tax
January 18, 2006
A key benefit of treating apples with 1-MCP is improved retention of fruit firmness
enabling Petitioner to market a product which will remain saleable for a substantially longer
period of time (up to several months) than an untreated product. The improved retention of fruit
firmness is evidence that the 1-MCP has become permanently attached to ethylene receptor sites
in the apples and continued its activity after removal of the apples from storage and following
shipment to the buyer.
Applicable law and regulations
Section 1105 of the Tax Law provides, in part:
Imposition of sales tax On and after June first, nineteen hundred seventy-one,
there is hereby imposed and there shall be paid a tax . . . upon:
(a) The receipts from every retail sale of tangible personal property, except as
otherwise provided in this article.
Section 1115(a)(1) of the Tax Law provides an exemption from the sales and use tax for:
Food, food products, beverages, dietary foods and health supplements,
sold for human consumption but not including (i) candy and confectionery, . . .
Section 528.2(a) of the Sales and Use Tax Regulations provides, in part:
Food and food products. (1) Food and food products, except candy and
confectionery, when sold for human consumption, are exempt from sales and
compensating use tax. See section 528.27 of this Part for exempt purchases of candy and
confectionery when purchased with food stamps.
(2) The terms food and food products as used in this section mean edible
commodities whether prepared, processed, cooked, raw, canned or in any other form,
which are generally regarded as food. This category includes, but is not limited to:
meat and meat products
milk products
cereals and grain products
baked goods
vegetables and vegetable products
fruits and fruit products
poultry
fish and seafood
frozen entrees and desserts

jellying agents
fats, oils and shortenings
condiments
spices
sweetening agents
food preservatives
food coloring
frozen dinners
snacks (except candy and confections)

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TSB-A-06(3)S
Sales Tax
January 18, 2006
*

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(3) The phrase sold for human consumption means that the items sold are, in their
normal use, regarded as being for human consumption. Pet foods, which are packaged,
labeled or advertised as such, are not deemed sold for human consumption.
Opinion
Petitioner purchases apples from various farmers, then cleans, sorts, packages and stores
the apples for sale, ultimately selling them to various grocery stores. During its storage of the
apples, Petitioner applies 1-MCP to the apples in order to extend their shelf life.
Section 1115(a)(1) of the Tax Law exempts food and food products when sold for human
consumption from sales and use tax. The terms food and food products include food
preservatives. See section 528.2(a)(2) of the Sales and Use Tax Regulations. While the term
food preservative is not defined in the Tax Law or Regulations, Merriam-Webster's Collegiate
Dictionary (10th ed 1993) defines the word preservative as "an additive used to protect against
decay, discoloration, or spoilage.”
It appears from the facts in this Opinion that 1-MCP acts as an additive used by Petitioner
to protect its apples against decay, discoloration, or spoilage. Therefore, 1-MCP is considered a
food preservative as contemplated in section 1115(a)(1) of the Tax Law and section 528.2 of the
Sales and Use Tax Regulations. Accordingly, Petitioner’s purchases of 1-MCP, for use in food
sold for human consumption, are exempt from sales tax.

DATED: January 18, 2006

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein