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Legal Excerpt Summaries for Albertsons' Bottled Water Sales Tax Fraud

(CBOE) Reference: F11-04-108-0502-0518 Inquiry


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"if the CRV labeling is on the distilled water container, the assumption would be that the distilled water is for human consumption. As such, the sales of the distilled water and the related CRV fees would be exempt from tax. " Response Annotation 245.0370 , Distilled Water, [see next section below] states that when the label on a bottle of distilled water does not include a reference to intended use or indicates the water is only for non-food purposes, the distilled water should not be regarded as sold for human consumption and its sale is thus subject to tax. When the label indicates that the distilled water is for drinking only or includes references to both; food and non-food uses, the sale of that bottle of distilled water qualifies for exemption from tax under section 6359. Annotations are not regulations of the Board and do not have the force or effect of law. In any instance where there is an inconsistency between the statutory law and an annotation, statutory law is controlling. =========================================================== State of California Memorandum Board of Equalization Legal Division-MIC: 82 245.0370
http://www.boe.ca.gov/sutax/annotations/pdf/245.0370.pdf

http://www.ripoffreport.com/grocery-stores/albertson-s-grocery/albertson-s-grocery-markets-c-33wwf.htm#

Subdivision (a) of section 6359 exempts sales of food products for human consumption. Subdivision (b)(3) of section 6359 defines bottled water as a food product. Accordingly, distilled water sold in bottles, such as in grocery stores, is a food product for purposes of the exemption. there has been an increase in sales of bottled distilled water for human consumption. Contrary to our prior view, we should thus recognize that some sales of distilled water are exempt sales of food products for human consumption. On the other hand, when a bottle of distilled water is labeled only for drinking, the sale of that bottle clearly should qualify for exemption under section 6359. we believe that for the administrative convenience of all, we should adopt the simple rule that if the label of a bottle of distilled water includes a reference that the distilled water is intended for human consumption, the sale of that bottle of distilled water should qualify for exemption ===========================================================

Excerpts from: Publication 27 MARCH 2010


http://www.boe.ca.gov/pdf/pub27.pdf

from page 7 Nontaxable sales The following are examples of drugstore sales that are generally not subject to tax: Food products (unless sold for consumption at your place of business.) Water, including bottled noncarbonated, noneffervescent drinking water. from page 9 Water Bottled water Sales of carbonated, effervescent bottled water are taxable. Sales of noncarbonated, noneffervescent drinking water are not taxable. When bottled water is not sold for human consumption, the sale of the water is taxable. Read the label. If the label includes a reference that the distilled water is intended for human consumption (drinking), the sale of the water qualifies for exemption as a food product. from page 10 California redemption value California Redemption Value (CRV) Table Beverages subject to the CRV when sold in glass, plastic, aluminum, and certain other metal containers if in liquid, ready-to-drink form and intended for people to eat (for human consumption) Water (carbonated and noncarbonated) =========================================================== California Revenue and Taxation Code Section 6359 (b) (3)
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=rtc&group=06001-07000&file=6351-6380

6359. (a) There are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of, food products for human consumption. (b) For the purposes of this section, "food products" include all of the following: (3) All fruit juices, vegetable juices, and other beverages, whether liquid or frozen, including bottled water, but excluding spirituous, malt, or vinous liquors or carbonated beverages. ===========================================================

CALIFORNIA PUBLIC RESOURCES CODE DIVISION 12.1, SECTIONS 14500, 14504, 14505, & 14561 14500. This division shall be known and may be cited as the California Beverage Container Recycling and Litter Reduction Act. 14504. (a) Except as provided in subdivision (b), "beverage" means any of the following products if those products are in liquid, ready-to-drink form, and are intended for human consumption: (4) Noncarbonated water, including noncarbonated mineral water. 14505. "Beverage container" means the individual, separate bottle, can, jar, carton, or other receptacle, however denominated, in which a beverage is sold. 14561. (a) A beverage manufacturer shall clearly indicate on all beverage containers sold or offered for sale by that beverage manufacturer in this state the message "CA Redemption Value," "California Redemption Value," "CA Cash Refund," "California Cash Refund," or "CA CRV," by either printing or embossing the beverage container or by securely affixing a clear and prominent stamp, label, or other device to the beverage container. ===========================================================
State of California
http://www.leginfo.ca.gov/cgi-bin/calawquery?codesection=prc&codebody=14561&hits=20 http://www.leginfo.ca.gov/cgi-bin/calawquery?codesection=prc&codebody=14504&hits=20

BOARD OF EQUALIZATION

SALES AND USE TAX REGULATIONS


www.boe.ca.gov/pdf/reg1602.pdf

Regulation 1602. FOOD PRODUCTS

(a) IN GENERAL. Tax does not apply to sales of food products for human consumption. (2) Food products include all fruit juices, vegetable juices, and other beverages, whether liquid or frozen, including all beverages composed in part of fruit or vegetable juice and concentrates, powders, or other bases for such beverages, and noncarbonated and noneffervescent bottled water intended for human consumption regardless of the method of delivery.
Amended February 18, 1970, applicable on and after January 1, 1970. History: Effective, except as above indicated, July 1, 1935. Amended June 25, 1981, effective November 1, 1981. Added Section 6359.6 to references; deleted amended effective dates in (a)(1) and (2) and (3). In (a)(2) added exemption for bottled water operative 1/1/81. Amended March 6, 1985, effective May 31, 1985. Subdivision (a)(2) has been changed to provide that the exemption from tax for the sale of noncarbonated and noneffervescent bottled water shall be expanded to apply to water sold in individual containers of one-half gallon or more in size. Amended September 29, 1994, effective October 29, 1994. Amended to provide that sales of snack foods are not subject to tax effective December 1, 1992; food products does not include carbonated or effervescent bottled water but does include noncarbonated and noneffervescent water intended for human consumption regardless of the method of delivery.