6351-6380
REVENUE AND TAXATION CODE
SECTION 6351-6380
6351. "Exempted from the taxes imposed by this part," as used in
this article, means, in case of the sales tax, exempted from the
computation of the amount of tax imposed.
6352. 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 tangible personal property the gross
receipts from the sale of which, or the storage, use, or other
consumption of which, this State is prohibited from taxing under the
Constitution or laws of the United States or under the Constitution
of this State.
6353. There are exempted from the taxes imposed by this part the
gross receipts derived from the sales, furnishing, or service of and
the storage, use, or other consumption in this state of, all of the
following:
(a) Gas, electricity, and water, including steam and geothermal
steam, brines, and heat, when delivered to consumers through mains,
lines, or pipes.
(b) (1) Liquefied petroleum gas, delivered to a qualified
residence by the seller, that is sold for household use in the
qualified residence, or liquefied petroleum gas that is purchased for
use by a qualified person to be used in producing and harvesting
agricultural products; provided, in either case, the liquefied
petroleum gas is delivered into a tank with a storage capacity for
liquefied petroleum gas that is equal to or greater than 30 gallons.
This subdivision may not be construed to provide any exemption from
any tax levied by a city, county, or city and county pursuant to
Section 7284.3, or any successor to that section.
(2) For purposes of this subdivision:
(A) "Qualified residence" means a primary residence, not serviced
by gas mains and pipes.
(B) "Qualified person" means any person engaged in a line of
business described in Codes 0111 to 0291, inclusive, of the Standard
Industrial Classification Manual published by the United States
Office of Management and Budget, 1987 Edition, and any other person
that assists that person in the lines of business described in this
paragraph in producing and harvesting agricultural products.
(c) Water, when sold to an individual in bulk quantities of 50
gallons or more, for general household use in his or her residence if
the residence is located in an area not serviced by mains, lines or
pipes.
(d) Exhaust steam, waste steam, heat, or resultant energy,
produced in connection with cogeneration technology, as defined in
Section 25134 of the Public Resources Code.
(e) The exemptions provided by subdivision (b) shall be effective
starting September 1, 2001, unless the State Board of Equalization
determines that implementation by that date is not feasible, in which
case the board shall, on or before that date, report to the
Legislature regarding the reasons why it must delay implementation,
and shall thereafter implement these exemptions no later than October
1, 2001.
6354. There are exempted from the taxes imposed by this part, the
gross receipts from the sales of commemorative "California Gold"
medallions produced and sold in accordance with Chapter 25
(commencing with Section 7551) of Division 7 of Title 1 of the
Government Code, and the storage, use, or other consumption in this
state of commemorative "California Gold" medallions so produced and
sold.
6355. (a) There are exempted from the taxes imposed by this part
the gross receipts from the sale in bulk of monetized bullion,
nonmonetized gold or silver bullion, and numismatic coins that are
substantially equivalent to transactions in securities or commodities
through a national securities or commodities exchange and the
storage, use, or other consumption in this state of monetized
bullion, nonmonetized gold or silver bullion, and numismatic coins so
sold.
(b) (1) A sale in bulk, for purposes of this section, shall be
deemed to have occurred if the amount of monetized bullion,
nonmonetized gold or silver bullion, and numismatic coins sold in the
transaction totals, in market value, the sum of one thousand dollars
($1,000) or more, or its equivalent.
(2) The board shall adjust the one thousand dollar ($1,000) amount
specified in paragraph (1) as follows:
(A) On or before September 1, 1994, and on or before each
September 1 of each year thereafter, the board shall multiply the
amount applicable for the current calendar year by the inflation
factor adjustment determined by the Franchise Tax Board pursuant to
subdivision (h) of Section 17041, the resulting amount to be the
applicable amount for the succeeding calendar year. The applicable
amount shall be operative as an adjustment of the amount specified in
paragraph (1) only when the applicable amount computed is equal to
or exceeds a new operative threshold, as defined in subparagraph (C).
(B) When the applicable amount equals or exceeds an operative
threshold specified in subparagraph (C), the resulting applicable
amount, rounded to the nearest multiple of five hundred dollars
($500), shall be operative for purposes of paragraph (1) beginning
January 1 of the succeeding calendar year.
(C) For purposes of this paragraph, "operative threshold" means an
amount that exceeds by at least five hundred dollars ($500), the
greater of either the amount specified in paragraph (1) or the amount
computed pursuant to subparagraphs (A) and (B) as the operative
adjustment to the amount specified in paragraph (1).
(c) "Monetized bullion," for purposes of this section, means coins
or other forms of money manufactured of gold, silver, or other metal
and heretofore, now, or hereafter used as a medium of exchange under
the laws of this state, the United States, or any foreign nation.
"Monetized bullion," for purposes of this section, also means gold
medallions struck under authority of the American Arts Gold Medallion
Act (Title IV of Public Law 95-630).
(d) A sale of monetized bullion, nonmonetized gold or silver
bullion, or numismatic coins, for purposes of this section, shall be
deemed to be substantially equivalent to a transaction in securities
or commodities through a national securities or commodities exchange,
if the sale is by or through a person registered pursuant to the
Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.) or not required to
be registered under the Commodity Exchange Act.
6356. There are exempted from the sales tax the gross receipts from
sales of vessels of more than 1,000 tons burden by the builders
thereof.
6356.5. (a) There are exempted from the taxes imposed by this part
the gross receipts from the sale of, and the storage and use of, or
other consumption in this state of, farm equipment and machinery, and
the parts thereof, purchased for use by a qualified person to be
used primarily in producing and harvesting agricultural products.
(b) For purposes of this section, both of the following shall
apply:
(1) "Qualified person" means any person engaged in a line of
business described in Codes 0111 to 0291, inclusive, of the Standard
Industrial Classification Manual published by the United States
Office of Management and Budget, 1987 Edition, and any other person
that uses farm equipment and machinery to assist this person in the
lines of business described in this paragraph in producing and
harvesting agricultural products.
(2) "Farm equipment and machinery" means implements of husbandry,
as defined in Section 411.
(c) (1) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with
Section 7251)), the exemption established by this section does not
apply with respect to any tax levied by a county, city, or district
pursuant to, or in accordance with, either of those laws.
(2) Notwithstanding subdivision (a), the exemption established by
this section does not apply with respect to any tax levied pursuant
to Sections 6051.2 and 6201.2, or pursuant to Section 35 of Article
XIII of the California Constitution.
(d) The exemption provided by this section shall be effective
starting September 1, 2001, unless the State Board of Equalization
determines that implementation by that date is not feasible, in which
case the board shall, on or before that date, report to the
Legislature regarding the reasons why it must delay implementation,
and shall thereafter implement the exemption provided by this section
no later than October 1, 2001.
6356.6. (a) There are exempted from the taxes imposed by this part
the gross receipts from the sale of, and the storage and use of, or
other consumption in this state of, equipment and machinery designed
primarily for off-road use in commercial timber harvesting
operations, and the parts thereof, that is purchased for use by a
qualified person to be used primarily in harvesting timber.
(b) The State Board of Equalization may adopt emergency
regulations to specify equipment and machinery exempted by this
section, and may revise those regulations from time to time.
(c) For purposes of this section, "qualified person" means any
person engaged in commercial timber harvesting.
(d) (1) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with
Section 7251)), the exemption established by this section does not
apply with respect to any tax levied by a county, city, or district
pursuant to, or in accordance with, either of those laws.
(2) Notwithstanding subdivision (a), the exemption established by
this section does not apply with respect to any tax levied pursuant
to Section 6051.2 and 6201.2, or pursuant to Section 35 of Article
XIII of the California Constitution.
(e) The exemption provided by this section shall be effective
starting September 1, 2001, unless the State Board of Equalization
determines that implementation by that date is not feasible, in which
case the board shall, on or before that date, report to the
Legislature regarding the reasons why it must delay implementation,
and shall thereafter implement the exemption provided by this section
no later than October 1, 2001.
6357. 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 motor vehicle fuel used in propelling
aircraft, except aircraft jet fuel, the distributions of which in
this state are subject to the tax imposed by Part 2 (commencing with
Section 7301) of this division and not subject to refund.
6357.1. (a) There are exempted from the taxes imposed by this part,
the gross receipts from the sale in this state of, and the storage,
use, or other consumption in this state of, diesel fuel used in
farming activities and food processing. This section shall be
implemented as soon as possible, but in no case later than September
1, 2001.
(b) For purposes of this section, "farming activities" has the
same meaning as "farming business" as set forth in Section 263A of
the Internal Revenue Code. "Farming activities" also includes the
transportation and delivery of farm products to the marketplace.
(c) The exemption established by this section does not apply with
respect to either of the following:
(1) A tax imposed under the Bradley-Burns Uniform Local Sales and
Use Tax Law (Part 1.5 (commencing with Section 7200)) or in
accordance with the Transactions and Use Tax Law (Part 1.6
(commencing with Section 7251)).
(2) A tax imposed under Section 6051.2 or 6201.2, or under Section
35 of Article XIII of the California Constitution.
6357.3. (a) On and after July 1, 2011, there are exempted from the
taxes imposed by Sections 6051.8 and 6201.8, the gross receipts from
the sale in this state of, and the storage, use, or other consumption
in this state of both of the following:
(1) Diesel fuel purchased for use or used in a manner that is
exempt from the tax imposed pursuant to Part 31 (commencing with
Section 60001) of Division 2 and not subject to the backup tax
imposed by Section 60058 or the payment requirement specified in
Section 60108.
(2) Diesel fuel subject to the payment requirement specified in
Section 60502.2.
(b) No exemption from the tax imposed pursuant to Sections 6051.8
and 6201.8 shall be allowed under this section unless the purchaser
furnishes the seller with an exemption certificate, completed in
accordance with any instructions or regulations as the board may
prescribe.
(c) If a purchaser certifies in writing to the seller that the
diesel fuel purchased without payment of the tax imposed pursuant to
Section 6051.8 or 6201.8 will be used in a manner entitling the
seller to regard the gross receipts or sales price from the sale as
exempt from that tax, and uses the diesel fuel in a manner that
subjects the diesel fuel to the tax imposed pursuant to Section
60050, the purchaser shall be liable for payment of the sales tax
imposed pursuant to Section 6051.8, with applicable interest, as if
the purchaser were a retailer making a retail sale of the diesel fuel
at the time the fuel is so used, and the sales price of the diesel
fuel to the purchaser shall be deemed the gross receipts from that
retail sale.
6357.5. (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 of, fuel and petroleum products sold to an air common
carrier for immediate consumption or shipment in the conduct of its
business as an air common carrier, on an international flight.
(b) To qualify for the exemption, the air common carrier shall
furnish to the seller an exemption certificate in writing stating the
quantity of fuel and petroleum products claimed as exempt. That
certificate shall bear the purchaser's valid seller's permit number
or valid fuel exemption registration number and shall be
substantially in the form prescribed by the board. Acceptance in good
faith of that certificate shall relieve the seller from liability
for the sales tax.
(c) "Immediate consumption or shipment," as used in this section,
means that the delivery of the fuel and petroleum products by the
seller is directly into an aircraft for consumption or transportation
on an international flight and not for storage by the purchaser or
any third party.
(d) "International flight," as used in this section, is a flight
whose final destination is a point outside of the United States.
(e) Any air common carrier claiming exemption under this section
who is not required to hold a valid seller's permit, shall be
required to register with the board and obtain a fuel exemption
registration number, and shall be required to file returns as the
board may prescribe, either if the board notifies the carrier that
returns must be filed or if the carrier is liable for taxes based
upon consumption or transportation of fuel or petroleum products
erroneously claimed as exempt under this section. A common carrier
required to hold a fuel exemption registration number shall be
subject to all applicable provisions of this part, Part 1.5
(commencing with Section 7200), and Part 1.6 (commencing with Section
7251).
(f) An air common carrier claiming an exemption under this section
upon request, shall make available to the board records, including,
but not limited to, a copy of a log abstract, an air waybill, or a
cargo manifest, documenting its consumption or transportation of the
fuel or petroleum products on an international flight and the amount
claimed as exempt. If the carrier fails to provide these records upon
request, the board may revoke the carrier's fuel exemption
registration number.
(g) The board may require any air common carrier claiming an
exemption under this section and required to obtain a fuel exemption
registration number, to place with it such security as the board may
determine pursuant to Section 6701.
(h) Pursuant to this section, any use of the fuel and petroleum
products by the purchasing carrier, other than that incident to the
delivery of the fuel and petroleum products to the carrier and the
consumption or transportation of the fuel and petroleum products by
the carrier on an international flight for use in the conduct of its
business as a common carrier, or a failure of the carrier to document
its consumption or transportation of the fuel and petroleum products
on an international flight, shall subject the carrier to liability
for payment of sales tax as if it were a retailer making a retail
sale of the property at the time of that use or failure, and the
sales price of the property to it shall be deemed to be the gross
receipts from the retail sale.
(i) In the event that the federal exemption provided in Section
1309 of Title 19 of the United States Code, relating to supplies for
certain vessels and aircraft, is repealed, this section is repealed
as of that date.
6357.7. (a) On and after July 1, 2010, there are exempted from the
taxes imposed by this part, the gross receipts from the sale in this
state of, and the storage, use, or other consumption in this state
of, motor vehicle fuel, as defined in Section 7326.
(b) (1) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with
Section 7251)), the exemption established by this section shall not
apply with respect to any tax levied by a county, city, or district
pursuant to, or in accordance with, either of those laws.
(2) The exemption established by this section shall not apply with
respect to any tax levied pursuant to Section 6051.2, 6051.5,
6201.2, or 6201.5, or pursuant to Section 35 of Article XIII of the
California Constitution.
(c) On and after July 1, 2010, the State Board of Equalization and
the Department of Finance shall recognize that the state no longer
receives state sales and use tax revenues from the sale of, and the
storage, use, or other consumption of, motor vehicle fuel for
purposes of any estimates required to be performed under paragraphs
(1) and (2) of subdivision (a) of Section 7102, and Section 7104.2.
6358. There are exempted from the taxes imposed by this part, the
gross receipts from the sale in this state of, and the storage, use,
or other consumption in this state of:
(a) Any form of animal life the products of which ordinarily
constitute food for human consumption.
(b) Feed for any form of animal life the products of which
ordinarily constitute food for human consumption or are to be sold in
the regular course of business.
(c) Seeds and plants the products of which ordinarily constitute
food for human consumption or are to be sold in the regular course of
business.
(d) Fertilizer to be applied to land the products of which are to
be used as food for human consumption or are to be sold in the
regular course of business.
(e) On or after January 1, 1997, drugs or medicines, including
oxygen, the primary purpose of which is the prevention or control of
disease, that are administered to animal life the products of which
ordinarily constitute food for human consumption.
6358.1. (a) There are exempted from taxes imposed by this part the
gross receipts from the sale of and the storage, use, or other
consumption in this state of either of the following:
(1) Organic products grown expressly for fuel purposes.
(2) Waste byproducts from agricultural or forest products
operations, municipal refuse, or manufacturing which are used in an
industrial facility as a fuel source in lieu of the use of either
oil, natural gas, or coal.
(b) In addition to subdivision (a), the exemption under this
section shall include the use of still gas produced in the refining
process from purchased crude oil.
6358.2. 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 wood shavings, sawdust, rice hulls, or
other products that are used as litter in poultry and egg production
and that are ultimately resold as, or incorporated into, fertilizer
products.
6358.4. There are exempted from the taxes imposed by this part, the
gross receipts from the sale in this state of, and the storage, use,
or other consumption in this state of, drugs or medicines
administered to animal life as an additive to feed or drinking water,
the primary purpose of which is the prevention and control of
disease of food animals, or of nonfood animals which are to be sold
in the regular course of business.
6358.5. (a) (1) There are exempted from the taxes imposed by this
part, the gross receipts from the sale in this state of, and the
storage, use, or other consumption in this state of, any racehorse
breeding stock.
(2) For purposes of this section "racehorse breeding stock" means
a horse that is capable of reproduction and for which the purchaser
states that it is the purchaser's sole intent to use the horse for
breeding purposes.
(b) (1) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with
Section 7251)), the exemption established by this section does not
apply with respect to any tax levied by a county, city, or district
pursuant to, or in accordance with, either of those laws.
(2) The exemption established by this section does not apply with
respect to any tax levied pursuant to either Section 6051.2 or
6201.2, or pursuant to Section 35 of Article XIII of the California
Constitution.
(c) The exemption provided by this section shall be effective
starting September 1, 2001, unless the State Board of Equalization
determines that implementation by that date is not feasible, in which
case the board shall, on or before that date, report to the
Legislature regarding the reasons why it must delay implementation,
and shall thereafter implement the exemption provided by this section
no later than October 1, 2001.
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:
(1) Cereals and cereal products, oleomargarine, meat and meat
products, fish and fish products, eggs and egg products, vegetables
and vegetable products, fruit and fruit products, spices and salt,
sugar and sugar products, candy, gum, confectionery, coffee and
coffee substitutes, tea, and cocoa and cocoa products.
(2) Milk and milk products, milkshakes, malted milks, and any
other similar type beverages that are composed at least in part of
milk or a milk product and that require the use of milk or a milk
product in their preparation.
(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.
(c) For purposes of this section, "food products" do not include
medicines and preparations in liquid, powdered, granular, tablet,
capsule, lozenge, and pill form sold as dietary supplements or
adjuncts.
(d) None of the exemptions in this section apply to any of the
following:
(1) When the food products are served as meals on or off the
premises of the retailer.
(2) When the food products are furnished, prepared, or served for
consumption at tables, chairs, or counters or from trays, glasses,
dishes, or other tableware whether provided by the retailer or by a
person with whom the retailer contracts to furnish, prepare, or serve
food products to others.
(3) When the food products are ordinarily sold for immediate
consumption on or near a location at which parking facilities are
provided primarily for the use of patrons in consuming the products
purchased at the location, even though those products are sold on a
"take out" or "to go" order and are actually packaged or wrapped and
taken from the premises of the retailer.
(4) When the food products are sold for consumption within a
place, the entrance to which is subject to an admission charge,
except for national and state parks and monuments, marinas,
campgrounds, and recreational vehicle parks.
(5) When the food products are sold through a vending machine.
(6) When the food products sold are furnished in a form suitable
for consumption on the seller's premises, and both of the following
apply:
(A) Over 80 percent of the seller's gross receipts are from the
sale of food products.
(B) Over 80 percent of the seller's retail sales of food products
are sales subject to tax pursuant to paragraph (1), (2), (3), or (7).
(7) When the food products are sold as hot prepared food products.
(e) "Hot prepared food products," for the purposes of paragraph
(7) of subdivision (d), include a combination of hot and cold food
items or components where a single price has been established for the
combination and the food products are sold in combination, such as a
hot meal, a hot specialty dish or serving, a hot sandwich, or a hot
pizza, including any cold components or side items. Paragraph (7) of
subdivision (d) does not apply to a sale for a separate price of
bakery goods or beverages (other than bouillon, consomm