SB 1151: Sales and Use Tax Law: exemptions: infant formula.
- Session Year: 2025-2026
- House: Senate
- Latest Version Date: 2026-09-27
Current Status:
Passed
(2026-09-27: Chaptered by Secretary of State. Chapter 680, Statutes of 2026.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
What does this bill do?
The bill adds infant formula to the list of food products that are exempt from California sales and use taxes, so buyers and retailers of infant formula would not pay those taxes on qualifying sales. It relies on the state Health and Safety Code definition of infant formula and says this is a clarification of existing law.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law provides various exemptions from those taxes, including an exemption for the gross receipts from the sale of, and the storage, use, or other consumption in this state of, food products for human consumption, as specified.
This bill would specify that food products includes infant formula.
This bill would take effect immediately as a tax levy.
Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law provides various exemptions from those taxes, including an exemption for the gross receipts from the sale of, and the storage, use, or other consumption in this state of, food products for human consumption, as specified.
This bill would specify that food products includes infant formula.
This bill would take effect immediately as a tax levy.
Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law provides various exemptions from those taxes. taxes, including an exemption for the gross receipts from the sale of, and the storage, use, or other consumption in this state of, food products for human consumption, as specified.
This bill would, on and after January 1, 2027, and before January 1, 2040, exempt from those taxes the gross receipts from the sale in this state, and the storage, use, or other consumption in this state, of infant formula, as defined. would specify that food products includes infant formula.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.This bill would take effect immediately as a tax levy.
Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law provides various exemptions from those taxes.
This bill would, on and after January 1, 2027, and before January 1, 2040, exempt from those taxes the gross receipts from the sale in this state, and the storage, use, or other consumption in this state, of infant formula, as defined.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.
Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy.
Existing law authorizes an individual to contribute amounts in excess of the individuals personal income tax liability for the support of specified funds, including the State Parks Protection Fund. Existing law requires, for each taxable year beginning on or after January 1, 2012, the Franchise Tax Board to revise the individual taxpayer return form to allow a taxpayer to designate an amount in excess of tax liability to be deposited to the State Parks Protection Fund. Existing law entitles a taxpayer making a contribution to receive a single state parks day use annual pass from the Department of Parks and Recreation if the price of the pass, as determined by the department, is less than or equal to the amount of the taxpayers contribution. Existing law allows a deduction for any contribution amount in excess of the price of the pass received, if any.This bill would make a nonsubstantive change to these provisions.Existing law authorizes an individual to contribute amounts in excess of the individuals personal income tax liability for the support of specified funds, including the State Parks Protection Fund. Existing law requires, for each taxable year beginning on or after January 1, 2012, the Franchise Tax Board to revise the individual taxpayer return form to allow a taxpayer to designate an amount in excess of tax liability to be deposited to the State Parks Protection Fund. Existing law entitles a taxpayer making a contribution to receive a single state parks day use annual pass from the Department of Parks and Recreation if the price of the pass, as determined by the department, is less than or equal to the amount of the taxpayers contribution. Existing law allows a deduction for any contribution amount in excess of the price of the pass received, if any.
This bill would make a nonsubstantive change to these provisions.
(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 includes 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.
(4)(A)Infant formula, as defined in Section 114094.5 of the Health and Safety Code.
(B)This paragraph does not constitute a change in, but is declaratory of, existing law.
(c)For purposes of this section, food products does not include any of the following:
(1)Medicines, including medicinal cannabis or medicinal cannabis products, as defined in Division 10 (commencing with Section 26000) of the Business and Professions Code, and preparations in liquid, powdered, granular, tablet, capsule, lozenge, and pill form sold as dietary supplements or adjuncts.
(2)Cannabis, as defined in Section 11018 of the Health and Safety Code, and cannabis products, as defined in Section 11018.1 of the Health and Safety Code.
(3)This addition of this subdivision does not constitute a change in, but is declaratory of, existing law.
(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 sellers premises, and both of the following apply:
(A)Over 80 percent of the sellers gross receipts are from the sale of food products.
(B)Over 80 percent of the sellers 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, consomme, or soup), or where the food product is purchased cold or frozen; hot prepared food products means those products, items, or components that have been prepared for sale in a heated condition and that are sold at any temperature that is higher than the air temperature of the room or place where they are sold.
(f)Notwithstanding paragraph (6) of subdivision (d), if the seller elects to separately account for sales of food products specified in subdivision (b), then the gross receipts from the sale of those food products shall be exempt under subdivision (a), provided that the separate accounting is fully documented in the sellers records. However, if the sellers records do not reflect the separate accounting of the gross receipts from sales of nontaxable food products, the sellers election under this subdivision shall be revoked.
SEC. 2.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(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 includes 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.
(4)(A)Infant formula, as defined in Section 114094.5 of the Health and Safety Code.
(B)This paragraph does not constitute a change in, but is declaratory of, existing law.
(c)For purposes of this section, food products does not include any of the following:
(1)Medicines, including medicinal cannabis or medicinal cannabis products, as defined in Division 10 (commencing with Section 26000) of the Business and Professions Code, and preparations in liquid, powdered, granular, tablet, capsule, lozenge, and pill form sold as dietary supplements or adjuncts.
(2)Cannabis, as defined in Section 11018 of the Health and Safety Code, and cannabis products, as defined in Section 11018.1 of the Health and Safety Code.
(3)This addition of this subdivision does not constitute a change in, but is declaratory of, existing law.
(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 sellers premises, and both of the following apply:
(A)Over 80 percent of the sellers gross receipts are from the sale of food products.
(B)Over 80 percent of the sellers 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, consomme, or soup), or where the food product is purchased cold or frozen; hot prepared food products means those products, items, or components that have been prepared for sale in a heated condition and that are sold at any temperature that is higher than the air temperature of the room or place where they are sold.
(f)Notwithstanding paragraph (6) of subdivision (d), if the seller elects to separately account for sales of food products specified in subdivision (b), then the gross receipts from the sale of those food products shall be exempt under subdivision (a), provided that the separate accounting is fully documented in the sellers records. However, if the sellers records do not reflect the separate accounting of the gross receipts from sales of nontaxable food products, the sellers election under this subdivision shall be revoked.
SEC. 2.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(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 includes 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.
(4)(A)Infant formula, as defined in Section 114094.5 of the Health and Safety Code.
(B)This paragraph does not constitute a change in, but is declaratory of, existing law.
(c)For purposes of this section, food products does not include any of the following:
(1)Medicines, including medicinal cannabis or medicinal cannabis products, as defined in Division 10 (commencing with Section 26000) of the Business and Professions Code, and preparations in liquid, powdered, granular, tablet, capsule, lozenge, and pill form sold as dietary supplements or adjuncts.
(2)Cannabis, as defined in Section 11018 of the Health and Safety Code, and cannabis products, as defined in Section 11018.1 of the Health and Safety Code.
(3)This addition of this subdivision does not constitute a change in, but is declaratory of, existing law.
(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 sellers premises, and both of the following apply:
(A)Over 80 percent of the sellers gross receipts are from the sale of food products.
(B)Over 80 percent of the sellers 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, consomme, or soup), or where the food product is purchased cold or frozen; hot prepared food products means those products, items, or components that have been prepared for sale in a heated condition and that are sold at any temperature that is higher than the air temperature of the room or place where they are sold.
(f)Notwithstanding paragraph (6) of subdivision (d), if the seller elects to separately account for sales of food products specified in subdivision (b), then the gross receipts from the sale of those food products shall be exempt under subdivision (a), provided that the separate accounting is fully documented in the sellers records. However, if the sellers records do not reflect the separate accounting of the gross receipts from sales of nontaxable food products, the sellers election under this subdivision shall be revoked.
SEC. 2.Notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any sales and use tax revenues lost by it under this act.SEC. 3.SEC. 2.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)On and after January 1, 2027, and before January 1, 2040, there are exempted from the taxes imposed by this part the gross receipts from the sale in this state, and the storage, use, or other consumption in this state, of infant formula.
(b)For purposes of this section, infant formula shall have the same meaning as defined in paragraph (2) of subdivision (d) of Section 114094.5 of the Health and Safety Code.
(c)This section shall remain in effect only until January 1, 2040, and as of that date is repealed.
SEC. 2.Notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any sales and use tax revenues lost by it under this act.
SEC. 3.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
SECTION 1.Section 18900.1 of the Revenue and Taxation Code is amended to read:18900.1.(a)For taxable years beginning on or after January 1, 2012, the Franchise Tax Board shall revise the individual taxpayer return form to allow an individual to designate a contribution in excess of tax liability, if any, be made to the State Parks Protection Fund established by Section 18900.2.(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. In the event that payments and credits reported on the return, together with any other credits associated with the taxpayers account, do not exceed the taxpayers tax liability, if any, the return shall be treated as though no designation had been made. In the event that no designee is specified, the contribution shall, after reimbursement of the direct actual costs of the Franchise Tax Board for the collection and administration of funds under the article, be transferred to the General Fund.(d)If an individual designates a contribution to more than one account or fund listed on the tax return, and the amount available is insufficient to satisfy the total amount designated, the contribution shall be allocated among the designated accounts on a pro rata basis.(e)A taxpayer making a designation under subdivision (a) shall be entitled to receive a single state parks day use annual pass from the Department of Parks and Recreation if the price of a single state parks day use annual pass, as determined by the Department of Parks and Recreation, is less than or equal to the amount of the taxpayers contribution.(f)The state parks day use annual pass that an individual is entitled to receive pursuant to this section shall provide the passholder with unlimited day use access to the California state parks that are accessible with a vehicle day use annual pass, as those parks are listed on the Department of Parks and Recreations internet website, and shall be valid for one year beginning on the date of issuance.(g)The Franchise Tax Board shall revise the form of the return to include a space labeled State Parks Protection Fund/Parks Pass Purchase to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that if the contribution amount is equal to or exceeds the price of a single state parks day use annual pass, as determined by the Department of Parks and Recreation, the taxpayer will be entitled to a single state parks day use annual pass from the Department of Parks and Recreation. The instructions shall also include information indicating that the contribution shall be used by the Department of Parks and Recreation to cover the costs of the issuance of state parks day use annual passes to individual taxpayers who made a designation for that purpose pursuant to this section, and for purposes related to the protection and preservation of state parks.(h)Notwithstanding the provisions of Article 2 (commencing with Section 19542) of Chapter 7, the Franchise Tax Board shall provide necessary information, including the names and addresses of individual taxpayers who contributed to the State Parks Protection Fund, to the Department of Parks and Recreation so that the department may contact the individuals entitled to a state parks day use annual pass under this section and implement a procedure for the distribution of a state parks day use annual pass to those individuals.(i)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a), but only with respect to the amount contributed in excess of the price of the state parks day use annual pass received, if any, pursuant to this section.(a)For taxable years beginning on or after January 1, 2012, the Franchise Tax Board shall revise the individual taxpayer return form to allow an individual to designate a contribution in excess of tax liability, if any, be made to the State Parks Protection Fund established by Section 18900.2.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. In the event that payments and credits reported on the return, together with any other credits associated with the taxpayers account, do not exceed the taxpayers tax liability, if any, the return shall be treated as though no designation had been made. In the event that no designee is specified, the contribution shall, after reimbursement of the direct actual costs of the Franchise Tax Board for the collection and administration of funds under the article, be transferred to the General Fund.
(d)If an individual designates a contribution to more than one account or fund listed on the tax return, and the amount available is insufficient to satisfy the total amount designated, the contribution shall be allocated among the designated accounts on a pro rata basis.
(e)A taxpayer making a designation under subdivision (a) shall be entitled to receive a single state parks day use annual pass from the Department of Parks and Recreation if the price of a single state parks day use annual pass, as determined by the Department of Parks and Recreation, is less than or equal to the amount of the taxpayers contribution.
(f)The state parks day use annual pass that an individual is entitled to receive pursuant to this section shall provide the passholder with unlimited day use access to the California state parks that are accessible with a vehicle day use annual pass, as those parks are listed on the Department of Parks and Recreations Internet Web site, internet website, and shall be valid for one year beginning on the date of issuance.
(g)The Franchise Tax Board shall revise the form of the return to include a space labeled the State Parks Protection Fund/Parks Pass Purchase to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that if the contribution amount is equal to or exceeds the price of a single state parks day use annual pass, as determined by the Department of Parks and Recreation, the taxpayer will be entitled to a single state parks day use annual pass from the Department of Parks and Recreation. The instructions shall also include information indicating that the contribution shall be used by the Department of Parks and Recreation to cover the costs of the issuance of state parks day use annual passes to individual taxpayers who made a designation for that purpose pursuant to this section, and for purposes related to the protection and preservation of state parks.
(h)Notwithstanding the provisions of Article 2 (commencing with Section 19542) of Chapter 7, the Franchise Tax Board shall provide necessary information, including the names and addresses of individual taxpayers who contributed to the State Parks Protection Fund, to the Department of Parks and Recreation so that the department may contact the individuals entitled to a state parks day use annual pass under this section and implement a procedure for the distribution of a state parks day use annual pass to those individuals.
(i)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a), but only with respect to the amount contributed in excess of the price of the state parks day use annual pass received, if any, pursuant to this section.
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Date
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Status
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|---|---|
| Sep 27, 2026 | Chaptered by Secretary of State. Chapter 680, Statutes of 2026. |
| Sep 27, 2026 | Approved by the Governor. |
| Aug 28, 2026 | Enrolled and presented to the Governor at 11 a.m. |
| Aug 24, 2026 | In Senate. Ordered to engrossing and enrolling. |
| Aug 24, 2026 | Read third time. Passed. (Ayes 78. Noes 0. Page 6372.) Ordered to the Senate. |
| Aug 24, 2026 | Read third time. Passed. Ordered to the Senate. |
| Jul 2, 2026 | Read second time. Ordered to third reading. |
| Jul 1, 2026 | From committee: Do pass. (Ayes 11. Noes 0.) (July 1). |
| Jun 16, 2026 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (June 15). Re-referred to Com. on APPR. |
| May 26, 2026 | Referred to Com. on REV. & TAX. |
| May 14, 2026 | In Assembly. Read first time. Held at Desk. |
| May 14, 2026 | Read third time. Passed. (Ayes 35. Noes 0. Page 4213.) Ordered to the Assembly. |
| May 14, 2026 | Read third time. Passed. (Ayes 35. Noes 0.) Ordered to the Assembly. |
| May 12, 2026 | Read second time. Ordered to consent calendar. |
| May 11, 2026 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8 and ordered to consent calendar. |
| May 7, 2026 | Set for hearing May 11. |
| May 6, 2026 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 5. Noes 0.) (May 6). Re-referred to Com. on APPR. |
| May 6, 2026 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 5. Noes 0. Page 4154.) (May 6). Re-referred to Com. on APPR. |
| Apr 29, 2026 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX. |
| Apr 9, 2026 | Set for hearing May 6. |
| Apr 8, 2026 | Re-referred to Com. on REV. & TAX. |
| Mar 25, 2026 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Feb 26, 2026 | Referred to Com. on RLS. |
| Feb 19, 2026 | From printer. May be acted upon on or after March 21. |
| Feb 18, 2026 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
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Date
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Description
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Location
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Votes
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| Aug 24, 2026 | SB 1151 Cervantes Senate Third Reading By Celeste Rodriguez | Assembly Floor |
Passed |
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| Jul 1, 2026 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
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| Jun 15, 2026 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Revenue and Taxation |
Passed |
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| May 14, 2026 | Consent Calendar 2nd SB1151 Cervantes | Senate Floor |
Passed |
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| May 6, 2026 | Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar | Senate Standing Committee on Revenue and Taxation |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
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Position
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Date
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| Department of Tax and Fee Administration (CDTFA) | ** Support |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-4171 | SB 1151 |
CONSENT
Bill No: SB 1151
Author: Cervantes (D)
Amended: 4/29/26
Vote: 21
SENATE REVENUE AND TAXATION COMMITTEE: 5-0, 5/6/26
AYES: McNerney, Alvarado-Gil, Ashby, Becker, Grayson
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Sales and Use Tax Law: exemptions: infant formula
SOURCE: Author
DIGEST:
This bill clarifies that infant formula is an exempt food product not subject to sales and use tax.
ANALYSIS:
Existing law:
- Imposes the sales tax on every retailer “engaged in business in this state” that sells tangible personal property, and requires them to register with the California Department of Tax and Fee Administration (CDTFA), as well as remit taxes collected from purchasers to CDTFA.
- Applies the sales tax whenever a retail sale occurs, which is generally any sale other than one for resale in the regular course of business.
- Provides that unless the purchaser pays the sales tax to the retailer, they are liable for the use tax, which is imposed on any person consuming tangible personal property in the state, and requires the purchaser to remit use tax to CDTFA.
- Sets the state sales and use tax rate at 7.25% of the sales price of the property sold or used, of which 3.9375% flows to the state General Fund.
- Fully exempts from sales and use tax many items, including food products for human consumption.
- Defines “food products” to included common grocery items that are cold when purchased, including: cereals and cereal products, milk and milk 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 other than candy and confectionery, coffee and coffee substitutes, tea, cocoa and cocoa products other than candy and confectionery.
- Specifies that “food products” did not include: spirituous, malt or vinous liquors; soft drinks, sodas, or beverages such as are ordinarily dispensed at bars and soda fountains or in connection therewith; medicines, tonics, and preparations in liquid, powdered, tablet, capsule, lozenge, pill form sold as dietary supplements or adjuncts, hot prepared food, food sold for consumption at retail establishments, cannabis, or cannabis products.
- Provides by regulation that exempt food products include: baby foods 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.
- Provides by regulation that exempt food products do not include: any product for human consumption in powdered form, which is described on its package or label as a food supplement, food adjunct, dietary supplement, or dietary adjunct, and prescribed or designed to remedy specific dietary deficiencies.
This bill:
- Revises the existing sales and use tax exemption for food products to specifically include infant formula as an exempt food product.
- States that the amendment made by this bill to specifically include infant formula as an exempt food product is declaratory of existing law.
Background
Infant formula. Infant formula is distinct from baby food in that it is most frequently sold in powdered form and often includes packaging and labeling that describe the formula’s digestive and immune support, vitamin content, prebiotic and probiotic benefits, and protein hydrolysis. At present, there are no known issues with retailers mislabeling infant formula as a powdered food supplement and collecting sales tax reimbursement from consumers, nor any issues arising at audit with respect to this matter.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
Senate Rule 28.8
SUPPORT: (Verified 5/12/26)
None received
OPPOSITION: (Verified 5/12/26)
None received
ARGUMENTS IN SUPPORT: According to the author, “SB 1151 would codify the infant formula sales tax exemption, ensuring that we continue to lower costs for parents purchasing formula, baby food, and related products. SB 1151 would tax-exempt the gross receipts from the sale in this state, and the storage, use, or other consumption in this state, of infant formula, to codify that infant formula is a food product. SB 1151 seeks to recognize infant formula as an essential item under the law, as a declaratory act, ensuring that financial burdens and supporting family stability and health are not imperiled.”
Prepared by: Haley Summers / REV. & TAX. / (916) 651-4117
10/23/26 9:32:34
**** END ****
SENATE THIRD READING
STR Bill Id:SB 1151
Author:(Cervantes)
As Amended Ver:April 29, 2026
Majority vote
SUMMARY
Adds "infant formula" to the definition of "food products" exempt from taxation under the Sales and Use Tax (SUT) Law.
Major Provisions
- Expands the existing definition of "food products" exempt from SUT to include "infant formula" as defined in Health and Safety Code Section 114094.5.
- Provides that the statutory inclusion of infant formula is declaratory of existing law.
- Takes immediate effect as a tax levy.
COMMENTS
- What would this bill do? This bill would add "infant formula" to the definition of "food products" exempt from taxation under the SUT Law, and would provide that this addition is declaratory of existing law.
- Is this bill necessary? Existing law already provides that milk and milk products are included within the definition of exempt food products under the SUT Law. In addition, the California Department of Tax and Fee Administration (CDTFA) has clarified through its regulatory authority that baby food is a food product for human consumption and has issued SUT annotations noting that baby formula and non-dairy formulas also qualify as food products exempt from taxation. As such, it is not readily clear to Committee staff what this bill is attempting to achieve. Moreover, to the extent greater definitional clarity is required, the Legislature may wish to consider whether this task would be better undertaken by CDTFA via its regulatory process.
According to the Author
The author has provided the following statement in support of this bill:
SB 1151 would codify the infant formula sales tax exemption, ensuring that we continue to lower costs for parents purchasing formula, baby food, and related products. SB 1151 would tax-exempt the gross receipts from the sale in this state, and the storage, use, or other consumption in this state, of infant formula, to codify that infant formula is a food product. SB 1151 seeks to recognize infant formula as an essential item under the law, as a declaratory act, ensuring that financial burdens and supporting family stability and health are not imperiled.
Arguments in Support
None on file
Arguments in Opposition
None on file
FISCAL COMMENTS
According to the Assembly Committee on Appropriations:
- No General Fund revenue loss, as the CDTFA has already clarified through its regulatory authority that baby formula and non-dairy formulas qualify as food products exempt from SUT.
- Minor and absorbable costs to CDTFA to update related informational materials.
VOTES
SENATE FLOOR: 35-0-5
YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Ochoa Bogh, Padilla, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Valladares, Wahab, Weber Pierson, Wiener
ABS, ABST OR NV: Blakespear, Niello, Pérez, Reyes, Umberg
ASM REVENUE AND TAXATION: 6-0-1
YES: Gipson, Carrillo, DeMaio, McKinnor, Quirk-Silva, Michelle Rodriguez
ABS, ABST OR NV: Sanchez
ASM APPROPRIATIONS: 11-0-4
YES: Wicks, Hoover, Arambula, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Solache, Ta
ABS, ABST OR NV: Calderon, Pellerin, Sharp-Collins, Tangipa
UPDATED
VERSION: April 29, 2026
CONSULTANT: M. David Ruff / REV. & TAX. / (916) 319-2098 FN: 0003271
Date of Hearing: July 1, 2026
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
SBPCA Bill Id:SB 1151
Author:(Cervantes) – As Amended Ver:April 29, 2026
Policy Committee: | Revenue and Taxation | Vote: | 6 - 0 |
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| ||
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill explicitly adds “infant formula” to the list of food products exempt from taxation under the Sales and Use Tax (SUT) Law.
This bill specifies that the addition does not constitute a change in, but is declaratory of, existing law.
FISCAL EFFECT:
- No General Fund revenue loss, as the Department of Tax and Fee Administration (CDTFA) has already clarified through its regulatory authority that baby formula and non-dairy formulas qualify as food products exempt from SUT.
- Minor and absorbable costs to CDTFA to update related informational materials.
COMMENTS:
- Purpose. According to the author, this bill “would codify the infant formula sales tax exemption” and “seeks to recognize infant formula as an essential item under the law, as a declaratory act, ensuring that financial burdens and supporting family stability and health are not imperiled.”
- Infant Formula. Existing law imposes SUT on the sale or use of tangible personal property, but provides an exemption for the sale or use of food products for human consumption and includes a list of various food and drink items. Notably, the list includes an exemption for milk and milk products. CDTFA has clarified through its regulatory authority and issued annotations that baby formula is a food product for human consumption exempt from taxation. This bill adds infant formula to the statutory list of exempted food products.
Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081
Date of Hearing: June 15, 2026
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Mike Gipson, Chair
SBPCA Bill Id:SB 1151
Author:(Cervantes) – As Amended Ver:April 29, 2026
Majority vote. Tax levy. Fiscal committee.
SENATE VOTE: 35-0
SUBJECT: Sales and Use Tax Law: exemptions: infant formula
SUMMARY: Adds "infant formula" to the definition of "food products" exempt from taxation under the Sales and Use Tax (SUT) Law. Specifically, this bill:
- Expands the existing definition of "food products" exempt from SUT to include "infant formula" as defined in Health and Safety Code Section 114094.5.
- Provides that the statutory inclusion of infant formula is declaratory of existing law.
- Takes immediate effect as a tax levy.
EXISTING FEDERAL LAW defines "infant formula" as a food which purports to be or is represented for special dietary use solely as a food for infants by reason of its simulation of human milk or its suitability as a complete or partial substitute for human milk. (21 United States Code Section 321(z).)
EXISTING STATE LAW:
- Imposes a sales tax on retailers for the privilege of selling tangible personal property (TPP), absent a specific exemption. The tax is based upon the retailer's gross receipts from TPP sales in this state. (Revenue and Taxation Code (R&TC) Section 6001 et seq.)
- Imposes a complimentary use tax on the storage, use, or other consumption of TPP generally purchased out-of-state and brought into California. The use tax is imposed on the purchaser; and unless the purchaser pays the use tax to an entity registered to collect California's use tax, the purchaser remains liable for the tax. The use tax is set at the same rate as the state's sales tax and must generally be remitted to the California Department of Tax and Fee Administration (CDTFA). (R&TC Section 6001 et seq.)
- Provides a SUT exemption for food products for human consumption, as specified (including baby formula). (R&TC Section 6359.)
- Provides that "infant formula" shall have the same meaning given in subdivision (z) of Section 321 of Title 21 of the United States Code. (Health and Safety Code Section 114094.5(d)(2).)
FISCAL EFFECT: The CDTFA notes that this bill has no revenue impact, because infant formula is already exempt under the SUT Law.
COMMENTS:
- The author has provided the following statement in support of this bill:
SB 1151 would codify the infant formula sales tax exemption, ensuring that we continue to lower costs for parents purchasing formula, baby food, and related products. SB 1151 would tax-exempt the gross receipts from the sale in this state, and the storage, use, or other consumption in this state, of infant formula, to codify that infant formula is a food product. SB 1151 seeks to recognize infant formula as an essential item under the law, as a declaratory act, ensuring that financial burdens and supporting family stability and health are not imperiled.
- Committee Staff Comments:
- What is a "tax expenditure"? Existing law provides various credits, deductions, exclusions, and exemptions for particular taxpayer groups. In the late 1960s, U.S. Treasury officials began arguing that these features of the tax law should be referred to as "expenditures" since they are generally enacted to accomplish some governmental purpose and there is a determinable cost associated with each (in the form of foregone revenues).
- What is a "tax expenditure"? Existing law provides various credits, deductions, exclusions, and exemptions for particular taxpayer groups. In the late 1960s, U.S. Treasury officials began arguing that these features of the tax law should be referred to as "expenditures" since they are generally enacted to accomplish some governmental purpose and there is a determinable cost associated with each (in the form of foregone revenues).
As the Department of Finance notes in its annual Tax Expenditure Report, there are several key differences between tax expenditures and direct expenditures. First, tax expenditures are reviewed less frequently than direct expenditures. Second, there is generally no control over the amount of revenue losses associated with any given tax expenditure. Finally, it should also be noted that, once enacted, it takes a two-thirds vote to rescind an existing tax expenditure absent a sunset date. This effectively results in a "one-way ratchet" whereby tax expenditures can be conferred by majority vote, but cannot be rescinded, irrespective of their efficacy or cost, without a supermajority vote.
- An overview of the SUT Law: The SUT represents the state's third largest source of General Fund (GF) revenues. Nevertheless, the past several decades have seen a dramatic reduction in the state's reliance on the SUT and a corresponding increase in its reliance on personal income tax revenues. In fiscal year (FY) 2026-27, SUT revenues are estimated to comprise only 15.2% of the state's GF revenues, down from nearly 60% in FY 1950-51.
- What accounts for the state's reduced reliance on SUT revenues? The SUT Law was enacted in a very different era. In the 1930s, California's economy was largely dominated by manufacturing, and residents mostly bought and sold tangible goods. Thus, in establishing the base for a new consumption tax, it made sense to impose the tax on sales of TPP, defined as personal property that may be "seen, weighed, measured, felt, or touched." Over the past 90 years, however, California's economy has seen dramatic growth in the service and information sectors, resulting in a significant erosion of the SUT base. For example, the Commission on the 21st Century Economy noted that spending on taxable goods represented 34.6% of personal income in 2008, down from 55.4% in 1980. As a result, tax experts and economists from across the political spectrum argue that California should expand its SUT base.
- What would this bill do? This bill would add "infant formula" to the definition of "food products" exempt from taxation under the SUT Law, and would provide that this addition is declaratory of existing law.
- Is this bill necessary? Existing law already provides that milk and milk products are included within the definition of exempt food products under the SUT Law. In addition, the CDTFA has clarified through its regulatory authority that baby food is a food product for human consumption and has issued SUT annotations noting that baby formula and non-dairy formulas also qualify as food products exempt from taxation. As such, it is not readily clear to Committee staff what this bill is attempting to achieve. Moreover, to the extent greater definitional clarity is required, the Committee may wish to consider whether this task would be better undertaken by CDTFA via its regulatory process.
- Prior legislation:
- AB 1203 (Bains), Chapter 833, Statutes of 2023, provides a SUT exemption for breast pumps, breast pump collection and storage supplies, breast pump kits, and breast pads. The exemption applies on or after April 1, 2024, and before April 1, 2029.
- AB 150 (Committee on Budget), Chapter 82, Statutes of 2021, indefinitely extended the SUT exemptions for diapers for infants, toddlers, and children, and for menstrual hygiene products.
- AB 85 (Committee on Budget), Chapter 8, Statutes of 2020, extended the SUT exemption for diapers for infants, toddlers, and children and menstrual hygiene products until July 1, 2023.
- SB 92 (Committee on Budget and Fiscal Review), Chapter 34, Statutes of 2019, provided a SUT exemption on and after January 1, 2020, and until January 1, 2022, for diapers for infants, toddlers, and children, and menstrual hygiene products, as defined.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-4171 | SB 1151 |
CONSENT
Bill No: SB 1151
Author: Cervantes (D)
Amended: 4/29/26
Vote: 21
SENATE REVENUE AND TAXATION COMMITTEE: 5-0, 5/6/26
AYES: McNerney, Alvarado-Gil, Ashby, Becker, Grayson
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Sales and Use Tax Law: exemptions: infant formula
SOURCE: Author
DIGEST:
This bill clarifies that infant formula is an exempt food product not subject to sales and use tax.
ANALYSIS:
Existing law:
- Imposes the sales tax on every retailer “engaged in business in this state” that sells tangible personal property, and requires them to register with the California Department of Tax and Fee Administration (CDTFA), as well as remit taxes collected from purchasers to CDTFA.
- Applies the sales tax whenever a retail sale occurs, which is generally any sale other than one for resale in the regular course of business.
- Provides that unless the purchaser pays the sales tax to the retailer, they are liable for the use tax, which is imposed on any person consuming tangible personal property in the state, and requires the purchaser to remit use tax to CDTFA.
- Sets the state sales and use tax rate at 7.25% of the sales price of the property sold or used, of which 3.9375% flows to the state General Fund.
- Fully exempts from sales and use tax many items, including food products for human consumption.
- Defines “food products” to included common grocery items that are cold when purchased, including: cereals and cereal products, milk and milk 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 other than candy and confectionery, coffee and coffee substitutes, tea, cocoa and cocoa products other than candy and confectionery.
- Specifies that “food products” did not include: spirituous, malt or vinous liquors; soft drinks, sodas, or beverages such as are ordinarily dispensed at bars and soda fountains or in connection therewith; medicines, tonics, and preparations in liquid, powdered, tablet, capsule, lozenge, pill form sold as dietary supplements or adjuncts, hot prepared food, food sold for consumption at retail establishments, cannabis, or cannabis products.
- Provides by regulation that exempt food products include: baby foods 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.
- Provides by regulation that exempt food products do not include: any product for human consumption in powdered form, which is described on its package or label as a food supplement, food adjunct, dietary supplement, or dietary adjunct, and prescribed or designed to remedy specific dietary deficiencies.
This bill:
- Revises the existing sales and use tax exemption for food products to specifically include infant formula as an exempt food product.
- States that the amendment made by this bill to specifically include infant formula as an exempt food product is declaratory of existing law.
Background
Infant formula. Infant formula is distinct from baby food in that it is most frequently sold in powdered form and often includes packaging and labeling that describe the formula’s digestive and immune support, vitamin content, prebiotic and probiotic benefits, and protein hydrolysis. At present, there are no known issues with retailers mislabeling infant formula as a powdered food supplement and collecting sales tax reimbursement from consumers, nor any issues arising at audit with respect to this matter.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
Senate Rule 28.8
SUPPORT: (Verified 5/12/26)
None received
OPPOSITION: (Verified 5/12/26)
None received
ARGUMENTS IN SUPPORT: According to the author, “SB 1151 would codify the infant formula sales tax exemption, ensuring that we continue to lower costs for parents purchasing formula, baby food, and related products. SB 1151 would tax-exempt the gross receipts from the sale in this state, and the storage, use, or other consumption in this state, of infant formula, to codify that infant formula is a food product. SB 1151 seeks to recognize infant formula as an essential item under the law, as a declaratory act, ensuring that financial burdens and supporting family stability and health are not imperiled.”
Prepared by: Haley Summers / REV. & TAX. / (916) 651-4117
5/13/26 16:28:005/13/26 16:28:00
**** END ****
SENATE COMMITTEE ON REVENUE AND TAXATION
Senator Jerry McNerney, Chair
2025 - 2026 Regular
Bill No: | SB 1151 | Hearing Date: | 5/6/26 |
Author: | Cervantes | Tax Levy: | Yes |
Version: | 4/29/26 Amended | Fiscal: | Yes |
Consultant: | Summers | ||
Sales and Use Tax Law: exemptions: infant formula
Clarifies that infant formula is an exempt food product not subject to sales and use tax.
Background
Tax expenditures. California law allows various tax incentives, such as credits, deductions, exemptions, and exclusions. When a tax law is determined to have a cost in the form of foregone revenues, such as a sales and use tax exemption, state law refers to them as “tax expenditures.” The Legislature enacts such tax incentives to compensate taxpayers for incurring certain expenses, such as costs related to child adoption, or to influence certain behaviors, such as participating in charitable giving. The Legislature uses tax incentives to encourage taxpayers to do something they would not otherwise do but for the tax incentive. The Department of Finance must publish an annual list of tax expenditures, currently totaling around $94.2 billion in forgone general fund revenue.
Sales and use tax (SUT). State law imposes the sales tax on every retailer selling tangible personal property in this state. Retailers must register with the California Department of Tax and Fee Administration (CDTFA) and remit sales tax amounts collected at sale to CDTFA. If the purchaser does not pay the sales tax to the retailer, the purchaser is liable for paying use tax to the CDTFA. The use tax is imposed on any person consuming tangible personal property in the state. The use tax must be remitted on or before the last day of the month following the quarterly period in which the person made the purchase. The use tax rate is the same as the sales tax rate. The table below shows that the current statewide SUT rate is 7.25%. Additionally, cities and counties may increase the sales and use tax rate up to 2% with voter approval for specific or general purposes pursuant to the California Constitution’s vote requirements.
Rate | Jurisdiction | Purpose/Authority |
|---|---|---|
3.9375% | State (General Fund) | State general purposes |
1.0625% | Local Revenue Fund (2011 Realignment) | Local governments to fund local public safety services |
0.50% | State (1991 Realignment) | Local governments to fund health and welfare programs |
0.50% | State (Proposition 172 - 1993) | Local governments to fund public safety services |
1.25% | Local (City/County) 1.00% City and County | City and county general operations. Dedicated to county transportation purposes |
7.25% | Total Statewide Rate |
Tax exemptions. Many items, such as prescription drugs, food, and poultry litter, are fully exempt from the SUT in California. Other items are exempted only from the state sales tax of 3.9375%, but not the local share, such as farm equipment and machinery, diesel fuel used for farming and food processing, teleproduction and postproduction equipment, timber harvesting equipment and machinery, and racehorse breeding stock. Further, while the United States government is exempt from paying the state SUT, state law does not provide a blanket exemption from the SUT for other public agencies such as cities, counties, special districts, or state agencies. As a result, these public agencies generally pay tax when purchasing tangible personal property or using it in the state.
Food exemption. State law generally exempts sales of food products for human consumption. When the exemption was first enacted in 1941, “food products” included common grocery items that are cold when purchased, including: cereals and cereal products, milk and milk 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 other than candy and confectionery, coffee and coffee substitutes, tea, cocoa and cocoa products other than candy and confectionery. “Food products” did not include: spirituous, malt or vinous liquors; soft drinks, sodas, or beverages such as are ordinarily dispensed at bars and soda fountains or in connection therewith; medicines, tonics, and preparations in liquid, powdered, tablet, capsule, lozenge, and pill form sold as dietary supplements or adjuncts.
The exemption has been amended several times since its enactment to clarify that hot prepared food, food sold for consumption at retail establishments, and cannabis and cannabis products are not exempt food products.
The author wants to ensure that infant formula is exempt from sales and use tax by clarifying that it is an exempt food product.
Proposed Law
Senate Bill 1151 amends the existing sales and use tax exemption for food products to include infant formula, and states that this clarification is declaratory of existing law.
State Revenue Impact
According to CDTFA, Senate Bill 1151 is a clarification of existing law and will not result in a revenue impact.
Comments
1. Purpose of the bill. According to the author, “SB 1151 would codify the infant formula sales tax exemption, ensuring that we continue to lower costs for parents purchasing formula, baby food, and related products. SB 1151 would tax-exempt the gross receipts from the sale in this state, and the storage, use, or other consumption in this state, of infant formula, to codify that infant formula is a food product. SB 1151 seeks to recognize infant formula as an essential item under the law, as a declaratory act, ensuring that financial burdens and supporting family stability and health are not imperiled.”
2. Best way? CDTFA regulations provide further clarification and examples of exempt food products, among which they specifically list baby foods 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. However, the regulations also state that “food products” do not include any product for human consumption in powdered form, which is described on its package or label as a food supplement, food adjunct, dietary supplement, or dietary adjunct, and prescribed or designed to remedy specific dietary deficiencies. Infant formula is distinct from baby food in that it is most frequently sold in powdered form and often includes packaging and labeling that describe the formula’s digestive and immune support, vitamin content, prebiotic and probiotic benefits, and protein hydrolysis. However, CDTFA indicates that there are no known issues with retailers mislabeling infant formula as a powdered food supplement and collecting sales tax reimbursement from consumers, nor are they aware of any issues arising at audit with respect to this matter. The Committee may wish to consider whether providing clarification regarding the exempt status of infant formula is best suited to CDTFA’s regulatory process.
Support and Opposition
(5/1/26)
Support: None received.
Opposition: None received.
-- END --
Discussed in Hearing
1MIN
Assembly Floor
5MIN
Assembly Standing Committee on Revenue and Taxation
Bill Author
Bill Co-Author(s):