J. L. HUDSON, SEEDSMAN, BOX 337, LA HONDA, CALIFORNIA 94020-0337 USA
So Sales Tax confuses you? (It confuses everyone!)
1) Outside of California, no sales tax, ever!
2) Inside California, pay 7.25% sales tax on everything except vegetable seeds.
3) Only if you live in San Mateo County, pay 8.75% sales tax.
4) If you are buying seeds for resale, send us a signed Resale Certificate.
DETAILS (More than you ever wanted to know!):
NOTE: The recent Supreme Court decision (South Dakota vs. Wayfair, Inc.) allowing states to collect their sales tax on internet sales from out of state does not apply to us - it only applies to large companies that sell more than $100,000 to that state. We are much too small to reach this threshold.
If you live outside California, and have your seeds mailed to an address outside California, California Sales Tax never applies. Your own state or local sales tax never applies either. Only if we had a physical location in your state would your own state sales tax apply. This confuses many people!
If you live in California:
You pay 7.25% on all seeds, books, etc., EXCEPT food plant seeds. You do not pay your own higher district tax (if any), unless you live in San Mateo County, and only if you live in San Mateo County - then you pay 8.75%.
Tax also does not apply to seeds that will produce a product that the purchaser of the seeds will resell, such as flowers - if you grow flowers to sell, you do not pay sales tax on the seeds that you grow those flowers from. Nurserymen who are purchasing seeds to grow plants they intend to sell also do not pay sales tax. In this case, you need to send us a signed resale certificate with your resale number (the first time you request) because the seeds are considered "for resale".
So what does all this mean? Our understanding of these regulations is that all seeds of plants that are ORDINARILY used for human food are not subject to sales tax. So SEEDS of all common vegetables, culinary herbs, fruit trees, etc., even if the plant that grows from the seed is perennial (like asparagus or rhubarb), should not be taxed. Seeds and growing plants are taxed differently - if you go to a local nursery and buy an ANNUAL food plant (not seed, but a growing plant), like a tomato, this should not be taxed, but if you buy a non-annual food plant, like asparagus or a fruit tree, at a nursery, this would be taxed. But SEEDS of non-annual food plants should not be taxed.
And please don't go giving me that "Hey I'm going to grow these giant sequoias and castor beans and foxglove to chop up the leaves for seasoning, so they are for food and I don't have to pay tax" routine - I've seen it all in the last forty-some years, and it just won't fly - the Sales Tax auditors at the BOE (Board of Equalization) won't buy it, and neither do I...
Also, San Mateo County is the only special tax district in which we have a physical presence - the requirement for collecting the district tax. So remember, only San Mateo County residents pay the extra tax. Everyone else pays only 7.25%, even if you have a higher local tax, it doesn't apply, because we do not have a physical store in your district.
Here is Regulation 1588 verbatim:
State of California
BOARD OF EQUALIZATION
SALES AND USE TAX REGULATIONS
"Regulation 1588. SEEDS, PLANTS AND FERTILIZER.
Reference: Sections 6358 and 6373, Revenue and Taxation Code.
(a) SEEDS AND PLANTS. Tax does not apply to sales of seeds and annual plants, the products of which ordinarily constitute food for human consumption or are to be sold in the regular course of the purchaser's business. Tax does not apply to sales of seed, the products of which will be used as feed for livestock and poultry of a kind the products of which ordinarily constitute food for human consumption or are to be sold in the regular course of the purchaser's business.
Tax applies to sales of nonannual [sic] plants, such as fruit trees and berry vines, regardless of the fact that the products will be sold or used as food for human consumption, unless the plants themselves, as distinguished from their products, are purchased for resale or, operative October 1, 1987, are eligible to be purchased with food stamp coupons acquired by the purchaser pursuant to the Food Stamp Act of 1977 and are so purchased.
(1) DEFINITION. The term "fertilizer" includes commercial fertilizers, agricultural minerals, and manure. The terms "commercial fertilizers" and "agricultural minerals" as used herein are defined in Sections 14516 (commercial fertilizer) and 14512 (agricultural minerals) of the Food and Agricultural Code. "Manure" means the excreta of any domestic animal or domestic fowl which is not artificially mixed with any material except a material which has been used for bedding, sanitary, or feeding purposes for such an animal or fowl or for the preservation of the manure. The term "fertilizer" does not include "soil amendments" or "auxiliary soil and plant substances" as these terms are defined (with the exception noted below) in Sections 14531 (soil amendments) and 14513 (auxiliary soil and plant substances) of the Food and Agricultural Code. For purposes of this regulation, "treated manures sold without guarantees for plant nutrients" as described in Section 14531 of the Food and Agricultural Code are not soil amendments.
(2) APPLICATION OF TAX. Tax does not apply to sales of fertilizer to be applied to land (including foliar application) the products of which are to be used as food for human consumption or sold in the regular course of business. Tax does not apply to sales of fertilizer to be applied to land the products of which will be used as feed for livestock and poultry of a kind the products of which ordinarily constitute food for human consumption or are to be sold in the regular course of the purchaser's business.
When insecticides are mixed with fertilizer and the mixture sold, that portion of the total price allocable to the fertilizer may be excluded from the measure of the tax if the mixed product is applied to land (including foliar application) the products of which are to be used for human consumption or sold in the regular course of business.
History: Adopted as of January 1, 1945, as a restatement of previous rulings.
Amended and renumbered March 24, 1970, effective April 29, 1970.
Amended August 20,1985, effective November 22, 1985. In Subdivision (b) (1), defined the term "fertilizer" to include the terms "commercial fertilizers ... .. agricultural minerals," and "manures" as those terms are defined in the Food and Agricultural Code and provided this term does not include soil amendments nor does it include auxiliary soil and plant substances. Corrected references to sections of the Food and Agricultural Code and defined the term "manure". Deleted the footnote which repeated the text of the applicable Food and Agricultural Code sections.
Amended August 24, 1988, effective November 18, 1988. In subdivision (a) amended to provide that effective October 1, 1987, non annual plants, such as fruit trees and berryvines [sic], which are eligible to be purchased with federal food stamp coupons and are so purchased are exempt from the sales and use taxes.
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."