Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Sales And Use Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 1. Sales and Use Taxes
Chapter 4. Exemptions

Article 1. General Exemptions

Section 6364

6364. Containers. There are exempted from the taxes imposed by this part, the gross receipts from the sale in this state of and the storage, use, or other consumption in this state of:

(a) Nonreturnable containers when sold without the contents to persons who place the contents in the container and sell the contents together with the container.

(b) Containers when sold with the contents if the sales price of the contents is not required to be included in the measure of the taxes imposed by this part.

(c) Returnable containers when sold with the contents in connection with a retail sale of the contents or when resold for refilling.

(d) Containers, when sold or leased without the contents to persons who place food products for human consumption in the container for shipment, provided the food products will be sold, whether in the same container or not, and whether the food products are remanufactured or repackaged prior to sale.

(e) For purposes of this section, "returnable containers" means containers of a kind customarily returned by the buyer of the contents for reuse. All other containers are "nonreturnable containers."

History—Added by Stats. 1943, p. 2456, operative July 1, 1943. Stats. 1943, p. 2620, operative July 1, 1943, added "or when resold for refilling" to end of (c). Stats. 1999, Ch. 758, (SB 1210), in effect October 10, 1999, but operative April 1, 2000, substituted "the sale in this state" for "sales" after "receipts from" and substituted "state" for "State" after "consumption in this" in subdivision (a); added subdivision (d); created new subdivision (e) from former last paragraph by substituting "(e) For purposes of this section," for "As used herein the term".

Sales of barrels and kegs.—Sales to a soft drink manufacturer of barrels and kegs used as containers of syrup sold to jobbers are exempt from sales tax as sales of nonreturnable containers when the manufacturer reserves no title in the containers, makes no separate charge for them and does not require a deposit or give a credit for their return. Coca-Cola Co. v. State Board of Equalization (1945) 25 Cal.2d 918.

Skinless sausage casings.—Cellulose sausage casings used in manufacture of skinless wieners but removed and destroyed prior to sale are not containers within the meaning of this section because the casings are not sold with the contents. Luer Packing Co. v. State Board of Equalization (1950) 101 Cal.App.2d 99.

Reused grocery cartons.—Cartons used to deliver groceries from supply centers to retail stores and then emptied and used to package and deliver groceries to customers are not exempt as nonreturnable containers. Safeway Stores, Inc. v. State Board of Equalization (1957) 148 Cal.App.2d 299.

Dry ice.—Dry ice packed with ice cream products in cardboard containers to delay melting does not constitute wrapping or packing material and is therefore not a container. Good Humor Co. v. State Board of Equalization (1957) 152 Cal.App.2d 873.

Containers for storage use only.—Original cans filled and used in this state to store tomato paste until further processing in another state are not exempt from sales and use tax as they are not purchased for resale and do not become an integral part of the finished product. H. J. Heinz Co. v. State Board of Equalization (1962) 209 Cal.App.2d 1.

Paper cups in vending machines.—Although under Section 6359.4, plaintiff was a consumer of tangible property sold through its vending machines, plaintiff's paper cups containing beverages dispensed through its vending machines were nevertheless exempt nonreturnable containers under Section 6364(a). Canteen Corp. v. State Board of Equalization (1985) 174 Cal.App.3d 952.

Reusable bottles.—The manufacturer of soft drinks is liable for use tax on its purchases of reusable bottles because the bottles were returned more than 50 percent of the time, were reused four times, and bore the taxpayer's trademark with the words "return for deposit." The taxpayers primary purpose in purchasing the bottles was not to resell them but to fill them with its product. Associated Beverage Company, Inc. v. State Board of Equalization (1990) 224 Cal.App.3d 192.