Every regulation in America is a rat's nest of exemptions, bones thrown to favored constituents, while those with insufficient influence pay the penalties. What Ayn Rand called the "aristocracy of pull."

An inescapable feature of a mixed economy.

This is why our tax code looks like it does, and believe me, until you have seen all the questions asked by Turbo Tax, you don't realize how much of this crap is out there.

This is also why lobbyists get the big bucks.

It is very amusing to see what foods are exempted from sales taxes in California. The list makes no sense at all. Reproduced below:

The COMPLETE California Sales Tax Regulations. What you see below is a tiny chunk of just the sales tax regulations in just one state. Now multiply this by the tens of thousands to arrive at the regulation load in all areas--not just taxes--that businesses and consumers have to deal with in this country. The fact that our economy is reasonably healthy despite the huge, maggot-dripping dead albatross of government interference that hangs around its neck says a lot for the people of America.

Try and imagine how much effort is required to comply with such rules. How many legal parasites are engaged in writing them and enforcing them. Try to imagine what our economy would be like without them.

State of California
BOARD OF EQUALIZATION
SALES AND USE TAX REGULATIONS
Regulation 1602. FOOD PRODUCTS.
Reference: Sections 6353 and 6359, Revenue and Taxation Code; California Constitution, Article XIII, Section 34.



(a) IN GENERAL. Tax does not apply to sales of food products for human consumption except as provided in
Regulations 1503, 1574 and 1603. (Grocers, in particular, should note that tax applies to sales of “hot prepared
food products” as provided in Regulation 1603(e).)

(1) “Food products” include cereal and cereal products, including malt and malt extracts, milk and milk products,
including ice cream, ice milk and ice cream and ice milk novelties, sherbets, imitation ice cream and imitation ice milk,
dried milk products, sugar of milk, milk shakes, malted milks, and any other similar type beverages composed at least
in part of milk or a milk product and requiring the use of milk or a milk product in their preparation, oleomargarine, meat and meat products, fish and fish products, eggs and egg products, vegetables and vegetable products, including dehydrated vegetables, fruit and fruit products, spices and salt, coffee and coffee substitutes, tea, cocoa and cocoa products, sugar and sugar products, baby foods, bakery products, marshmallows, baking powder, baking soda, cream of tartar, coconut, flavoring extracts, flour, gelatin, jelly powders, mustard, nuts, peanut butter, sauces, soups, syrups (for use as an ingredient of, or upon, food products as defined herein), yeast cakes, olive oil, bouillon cubes, meat extracts, popcorn, honey, jams, jellies, certo, mayonnaise, and flavored ice products, including popsicles and snow cones. “Food products” include candy, confectionery, chewing gum, and snack foods except as provided in subdivisions (a)(3) and (a)(4) below.

(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. “Food products” does not include carbonated or effervescent bottled waters, spirituous, malt or vinous liquors, or carbonated beverages.

For the period July 15, 1991 through November 30, 1992, “food products” does not include noncarbonated and
noneffervescent bottled water. Sales of purified drinking water through vending machines or outlets in retail stores
where the water enters the machine or outlet through local supply lines and is dispensed into the customer’s own
containers are exempt under Revenue and Taxation Code section 6353.

Tax does not apply to sales of water in bulk quantities of 50 gallons or more to an individual for use in a residence when that residence is not serviced by lines, mains or pipes.

(3) For the period July 15, 1991 through November 30, 1992, “food products” do not include nonmedicated
chewing gum and breath mints.

(4) “Food products” do not include medicines, cough drops, mineral oils, cigarettes, cigars, tobacco, coloring
extract, ice, and dog, cat, bird and other animal foods, and for the period July 15, 1991 through November 30, 1992,
candy, confectionery, and snack foods.

(A) Snack Foods. For purposes of this section, “snack foods” means cookies, crackers (excluding soda,
graham and arrowroot crackers), potato, corn, rice or tortilla chips, snack cakes or pies, pretzels, granola snacks,
popped popcorn, fabricated chips and snacks.

1. “Snack foods” does not include doughnuts, breads, pastry and other bakery products (other than
cookies, crackers, snack cakes and pies).

2. “Snack foods” does not include nuts or nut meats, seeds, or dried fruit snacks.

3. “Snack foods” does not include beef jerky and similar dried meat products, natural pork skins, hot dogs, franks, weiners, sausages, canned meat products, or sandwich meats whether sliced or unsliced.

4. “Soda crackers” are a thin, crisp saltine wafer or biscuit made with flour, yeast, water, shortening, salt,
and soda. The term does not include such bakery items which are chemically leavened or contain one or more flavoring agents, for example, honey, sugar, or molasses. The term also does not include panned butter, malt, milk, fat sprayed, cheese, and pilot bread crackers.

(B) “Snack foods” means items which are sold in a condition suitable for immediate consumption without further
processing such as cooking, heating, or thawing.

1. “Fabricated snacks” means snacks made from components, including food components, which are
processed and formed. “Fabricated snacks” includes, but is not limited to, such items as grain cakes, shoestring potato snacks, food bars or squares, and extruded snacks. The term does not include “meal replacement bars” which supply, per serving (as defined by the manufacturer), at least 250 calories and 25% of the U.S. RDA of vitamins and minerals (as established by regulations of the United States Food and Drug Administration).

2. “Extruded snacks” includes, but is not limited to, curls, puffs, twists, balls, filled snacks, and pellet-based
snacks.

(C) “Snack cakes or pies” means cakes or pies which are baked or fried in individual serving sizes or cut and
pre-wrapped or pre-packaged for subsequent sale in individual serving sizes, whether sold individually or packaged
together. A package of single-serving items is subject to tax. The term does not include whole cakes or pies nor does it include a slice of pie or cake which is not pre-wrapped or pre-packaged at the time of sale.

(D) “Granola snacks” means granola bars and squares but does not include granola sold in bulk, cereals, and
trail mixes.

(E) Candy and Confectionery. For the period July 15, 1991 through November 30, 1992, tax applies to sales
of candy and confectionery, which includes chocolate-coated nuts, candied fruits, crystallized fruits and glace fruits.

(5) “Food products” do not include any product for human consumption in liquid, powdered, granular, tablet,
capsule, lozenge, or pill form (A) which is described on its package or label as a food supplement, food adjunct, dietary supplement, or dietary adjunct, and to any such product (B) which is prescribed or designed to remedy specific dietary deficiencies or to increase or decrease generally one or more of the following areas of human nutrition:

1. Vitamins
2. Proteins
3. Minerals
4. Caloric intake

In determining whether a product falls within category (B), it is important whether the manufacturer has specially mixed or compounded ingredients for the purpose of providing a high nutritional source. For example, protein supplements and vitamin pills are taxable as food supplements. Other items, such as cod liver oil, halibut liver oil, and wheat germ oil, are considered dietary supplements and thus subject to tax even though not specially compounded. However, unusual foods such as brewer’s yeast, wheat germ and seaweed are not subject to tax except when their label states they are a food supplement or the equivalent. Finally, the compounding of nutritional elements in items traditionally accepted as food does not make them taxable, e.g., vitamin-enriched milk and high protein flour.

Tax, however, does not apply to any such products which either are exempted by Revenue and Taxation Code section 6369, respecting prescription medicines, or are complete dietary foods providing the user in the recommended daily dosage with substantial amounts of vitamins, proteins, minerals and foods providing adequate caloric intake. An example of the latter is a food daily providing the user with the following:

1. 70 grams of high quality protein
2. 900 calories
3. Minimum daily requirements as established by the regulations of the Federal Food and Drug Administration of the following vitamins: A, B1, C, D, Riboflavin, and Niacin or Niacinamide; and following minerals: Calcium, Phosphorus, Iron and Iodine.

(b) SALES OF COMBINATION PACKAGES. When a package contains both food products (e.g., dried fruit) and
nonfood products (e.g., wine, or toys), the application of tax depends upon the essential character of the complete
package. If more than 10 percent of the retail value of the complete package, exclusive of the container, represents
the value of the nonfood merchandise, a segregation must be made and the tax measured by the retail selling price
of such nonfood merchandise.

Regulations are issued by the State Board of Equalization to implement, interpret or make specific provisions of
the California Sales and Use Tax Law and to aid in the administration and enforcement of that law. If you are in
doubt about how the Sales and Use Tax Law applies to your specific activity or transaction, you should write the
nearest State Board of Equalization office. Requests for advice regarding a specific activity or transaction should
be in writing and should fully describe the facts and circumstances of the activity or transaction.

(c) SALES OF NON-EDIBLE DECORATIONS. When the sale of a cake or other bakery good for a single price includes
non-edible decorations, the application of tax depends upon the value of the non-edible merchandise versus the value of the cake or bakery good. If more than 50 percent of the total retail value of the cake or bakery good represents the value of non-edible decorations, a segregation must be made and the tax measured by the retail selling price of such non-edible decorations. If the price of the non-edible decoration is separately stated, then tax applies to such charge.

(d) FOOD PRODUCTS PROCESSED BY THE CONSUMER. A commodity included in the term “food products” under
Revenue and Taxation Code section 6359 may be sold to a consumer to be processed and incorporated into a product which is for human consumption but which is excluded from the term “food products.” For example, grapes may be sold to be used in making wine for consumption and not for resale. If the commodity sold to the consumer is included in the term “food products” and if the product into which it is incorporated is for human consumption, the sale of the commodity is within the exemption provided by this section.

History: Effective, except as above indicated, July 1, 1935.
Amended August 19, 1953.
Amended September 18, 1963.
Amended September 2, 1965, applicable as amended September 17, 1965.
Amended November 3, 1969, applicable on and after January 1, 1970.
Amended February 18, 1970, applicable on and after January 1, 1970.
Amended and renumbered November 3, 1971, effective December 3, 1971.
Amended December 15, 1971, applicable on and after December 15, 1971.
Amended February 16, 1972, effective March 25, 1972.
Amended May 10, 1973, effective June 23, 1973.
Amended September 18, 1973, effective October 27, 1973.
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 January 1, 1981.
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 August 1, 1991, effective August 30, 1991. Amended pursuant to Chapter 85, Statutes of 1991, and Chapter 88, Statutes of 1991, to exclude from the definition of “food products” snack foods, as defined, candy, confectionery and nonmedicated gum and to repeal the exemption from tax for sales of noncarbonated and noneffervescent bottled water under certain conditions. Chapter 85, Stats 1991, repealed the exemption effective July 1, 1991; Chapter 88, Stats 1991, changed the effective date to July 15, 1991.
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.
Amended March 17, 1999, effective June 12, 1999. New subdivision (c) added, old subdivision (c) renumbered to (d).