J. L. HUDSON, SEEDSMAN, BOX 337, LA HONDA, CALIFORNIA 94020-0337 USA
So Sales Tax confuses you? (It confuses everyone!)
QUICK SUMMARY:
1) Outside of California, no sales tax, ever!
2) Inside California, pay 7.25% sales tax on everything except vegetable
seeds.
Sales Tax Chart: https://www.jlhudsonseeds.net/7.25%
Sales Tax Chart.pdf
3) Only if you live in San Mateo County, pay 9.375% sales tax.
Sales Tax Chart: https://www.jlhudsonseeds.net/San
Mateo County Sales Tax Chart.pdf
4) You do not pay your local city sales tax rate, only the state or San Mateo
county rate
5) 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. (NOTE:
This decision is also entirely unconstitutional - only Congress is allowed to
tax interstate commerce!)
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 9.375%.
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 fifty-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.
(b) FERTILIZER.
(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."