Publication 61, Sales and Use Taxes: Tax Expenditures Fiscal Year 2023–24
Tax Expenditures: General Public Benefit
Provisions That Give Special Tax Treatment for Items or Activities Which Benefit the General Public
Alternative Energy
Recycled Feedstock, Advanced Manufacturing, Advanced Transportation Technologies
Until January 1, 2028, there is a specific exclusion for qualifying entities that apply for financial assistance from the California Alternative Energy and Advanced Transportation Financing Authority for specified tangible personal property purchased for projects that process or use recycled feedstock or that are used in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems.
Cogeneration Technology
The sale of exhaust steam, steam waste, heat or resultant energy produced by cogeneration technology, as defined, is exempt from sales and use taxes.
Fuel From Organic Products and Waste By-Products
Sales of organic products grown for fuel, sales of waste byproducts from agricultural or forest products operations, municipal refuse, or manufacturing, that are used in an industrial facility as a source of fuel, and the use of still gas produced in the refining process from purchased crude oil are exempt from tax.
Museums and Public Art Exhibits
Art Work
Sales of original works of art are exempt from sales and use tax when purchased by any California state or local entity, or by certain nonprofit organizations under contract with such governmental entities, or by certain nonprofit organizations for public exhibit, or by people for donation directly to any such governmental or nonprofit organization. In addition, the sales and use tax exemption applies only to works of art purchased or leased to become part of the permanent collection of nonprofit organizations that (1) regularly loan at least 85 percent (85%) of the value of their art collection to museums, or to this state or any local government entity which displays the art to the public in public places, (2) qualified for exemption from state income tax according to Revenue and Taxation Code section 23701(d), and (3) is required by its articles of incorporation to loan its works of art and is otherwise prohibited by its articles from making any private use of its works of art.
Museums
Sales to and purchases by the state or a local government entity as part of a public art collection, a nonprofit museum regularly open to the public and operated by a local or state government entity, or operated by certain nonprofit organizations, are exempt from tax when the property is purchased to replace destroyed property used exclusively for display purposes. In addition, only property that has value as a museum piece purchased within three years from the date the original property was destroyed, qualifies for exemption.
San Diego Air and Space Museum and The California Science Center
The sale and use of museum display items and sprung instant structures used as temporary exhibit housing sold to or purchased by these museums are exempt from sales and use tax.
Auxiliary Services to Museums
Nonprofit associations and organizations that perform auxiliary services to any city or county museum in this state are consumers of property which they sell provided the profits are used for purposes of the organization.
Nonprofit, Religious, and Educational Organizations
Endangered and Threatened Animal and Plant Species
The sale and use of endangered and threatened animal and plant species are exempt from tax if both the seller and the purchaser are qualifying nonprofit zoological societies. Also, transfers of any endangered or threatened animal or plant species acquired or disposed of through a trade or exchange between nonprofit zoological societies or between a member of the American Zoo and Aquarium Association and a nonprofit zoological society are excluded from the definition of “sale” and “purchase.”
All-Volunteer Fire Departments
Until January 1, 2031, an all-volunteer fire department is a consumer of tangible personal property it sells if the profits are used solely and exclusively to further its purposes, provided the all-volunteer fire department has gross receipts from its tangible personal property sales of less than $100,000 in the preceding two calendar years.
Notes
- Please note that due to lack of data, this is an approximated revenue loss associated with this consumer designation by estimating the revenue loss that would occur if the tangible personal property sold were fully exempt from sales and use tax.
Vehicles Loaned to University Employees
A retailer will not owe use tax on his or her full purchase price of vehicles loaned to any employee of the University of California or the California State University provided the vehicle is for the employee’s exclusive use, the loan has been approved by the chancellor or president of the university, and it is demonstrated that the loan is not dependent on the retailer receiving any automotive-related business from the university. The retailer will instead owe tax on the fair rental value of the loaned vehicle for the period of the loan.
Nonprofit Veterans’ Organizations
Such organizations are consumers of flags of the United States of America which they sell if profits are used solely for furtherance of the purposes of the organization.
Vending Machine Sales
Nonprofit, charitable or educational organizations are consumers of tangible personal property sold through vending machines for 15 cents ($0.15) or less. Library districts, municipal libraries, or county libraries and any vendor making sales according to a contract with these libraries are consumers of, and shall not be considered the retailers of, photocopies which are sold at retail through coin-operated or cardoperated copy machines located at a library facility.
“Buddy Poppies” and Similar Lapel Pins
The sale and use of a “Buddy Poppy” or any other symbolic, impermanent lapel pin that memorializes United States Military veterans killed in foreign wars of the United States, by any corporation established by the United States Congress according to Chapter 2301 (commencing with section 230101) of Title 36 of the United States Code, or any of that corporation’s subordinate state or territorial subdivisions, local chapters, posts, or auxiliaries, are exempt from tax.
Youth Organizations
The following organizations are consumers, rather than retailers, of food products, nonalcoholic beverages, and tangible personal property made or produced by members of the organization when those sales are made on an irregular or intermittent basis and the organization’s profits from those sales are used exclusively in furtherance of the purposes of the organization: (1) any nonprofit organization which qualifies for tax exempt status under Internal Revenue Code section 501(c) whose primary purpose is to provide a supervised program of competitive sports for youth or to promote good citizenship in youth and which does not discriminate on the basis of race, sex, nationality, or religion; (2) any youth group sponsored by or affiliated with a qualified educational institution, including, but not limited to, any student activity club, athletic group, or musical group; and (3) any Little League, Bobby Sox, Boy Scouts, Cub Scouts, Girl Scouts, Campfire, Inc., Young Men’s Christian Association, Young Women’s Christian Association, Future Farmers of America, Future Homemakers of America, 4-H Clubs, Distributive Education Clubs of America, Future Business Leaders of America, Vocational Industrial Clubs of America, Collegiate Young Farmers, Boys’ Clubs, Girls’ Clubs, Special Olympics, Inc., American Youth Soccer Organization, California Youth Soccer Association-North, California Youth Soccer Association-South, and Pop Warner Football.
Nonprofit Organizations, Artistic or Handcrafted Property
A qualified nonprofit organization whose primary purpose is to provide services to children with severe emotional disturbances or individuals with developmental disabilities, and that does not discriminate on the basis of race, sex, nationality, or religion, is a consumer of tangible personal property which it sells, provided that the property is of a handcrafted or artistic nature and is designed, created, or made by individuals with developmental disabilities or children with severe emotional disturbances who are members of, or receive services from, the organization. For the organization to qualify as a consumer, the price of each item sold must not exceed 20 dollars ($20), and the profits from the sales must be used exclusively in furtherance of the purposes of the organization. In addition, the organization’s sales must be made on an irregular or intermittent basis.
School Yearbooks and Catalogs
Public or private schools, school districts, county offices of education, and student organizations are consumers of yearbooks and catalogs prepared by or for them and distributed to students.
Student Meals
The sales and use of meals and food products are exempt from tax when sold or furnished to students by a public or private school, school district, student organization, parent-teacher association, and any blind vendor operating a restaurant or vending stand in an educational institution unless sold for consumption within a place subject to an admission charge except for national and state parks and monuments.
Nonprofit Organizations, Auction Sales
The sale and use of tangible personal property that is sold to a successful bidder at an auction conducted no more than once in any 12-month period by a qualifying nonprofit organization are exempt from sales and use tax if the purpose of that auction is to obtain revenue for funding of a shelter for homeless individuals and families and those revenues obtained are actually used for that purpose.
Nonprofit Organizations, Thrift Stores
The sale and use of used clothing, household items, or other retail items sold by thrift stores operated by a qualifying nonprofit organization are exempt from tax until January 1, 2029, if the purpose of that thrift store is to obtain revenue for the funding of medical and social services to chronically ill individuals with HIV or AIDS and at least 75 percent (75%) of the net income derived from operations of the thrift store are expended for that purpose.
Military Designated Entities, Thrift Stores
The sales and use of tangible personal property sold by a thrift store located on a military installation and operated by a specified designated entity are exempt from sales and use tax, provided the designated entity, in partnership with the United States Department of Defense, provides financial, educational, and other assistance to members of the armed forces of the United States, eligible family members, and survivors when in need.
Religious Organizations
The sale and use of meals and food products furnished or served by a religious organization at a social or other gathering conducted by it or under its auspices are exempt from tax if the proceeds are used to carry on the functions and activities of the organization.
Meals Delivered to Homebound Elderly and Disabled
The sale and use of meals that are delivered to homebound elderly or disabled people by a nonprofit volunteer home delivery meal provider are exempt from tax.
Nonprofit Veterans’ Organizations, Meals and Food Products
The sales and use of meals and food products furnished or served by any nonprofit veterans’ organization at a social or other gathering conducted by it or under its auspices are exempt from tax if the proceeds are used to carry on the functions and activities of the organization.
Military and Veteran Medical Facilities
Beginning January 1, 2019, and before January 1, 2025, the sales of building materials and supplies purchased by a qualified person for use by that person in the construction of specified military and veteran medical facilities are exempt from tax. A qualified person includes a qualified nonprofit organization, or a contractor, subcontractor, or builder working under contract with the qualified nonprofit organization to construct the facility.
Friends Of the Library and Equivalent Organizations
Nonprofit associations commonly called The Friends of the Library and equivalent organizations performing auxiliary services to any library district, municipal library, or county library in the state, which are authorized to operate within the library by the governing authority of the library, are consumers of tangible personal property which they sell if the profits from the sales are used exclusively to further the organization’s purposes.
Parent-Teacher Associations
Nonprofit parent-teacher associations chartered by the California Congress of Parents, Teachers, and Students, Incorporated (PTA) or equivalent organizations authorized to operate within the school by the governing authority of the school are consumers of property which they sell if the profits are used exclusively to further the organization’s purposes.
Parent Cooperative Nursery Schools
Nonprofit parent cooperative nursery schools are consumers of property which they sell if the profits are used exclusively to further the organization’s purposes.
Charitable Organizations
The sale and use of property that is made, prepared, assembled, or manufactured by certain nonprofit charitable organizations that are engaged in relief of poverty and distress, and whose sales or donations are made to assist purchasers or donees are exempt from sales and use taxes.
Nonprofit Organization, New Children’s Clothing
The sale and use of new children’s clothing are exempt if sold to a qualifying nonprofit organization for distribution without charge to elementary schoolchildren.
Donations
A seller’s donation of property to a qualifying nonprofit organization located in California is exempt from use tax. If the donee is a qualifying nonprofit museum, the donee must use the donated property exclusively for display purposes.
Property Loaned to Educational Institutions
A retailer’s loan of property to any school district for an educational program is exempt from use tax. In addition, a retailer’s loan of a vehicle to a California State College or the University of California, or to an accredited private or parochial secondary school for use in a qualified driver education program, is exempt from use tax. A retailer’s loan of a vehicle to a veteran’s hospital or such other nonprofit facility or institution to provide instruction in specially equipped vehicles to disabled veterans is also exempt from use tax.
Other
Pollution Control Facility
The transfer of title to property constituting any project or pollution control facility by the California Pollution Control Financing Authority is not a “sale” or “purchase” for purposes of sales and use tax when the transfer or lease is made according to certain provisions of the Health and Safety Code.
Bracelets, Prisoners of War
Charitable organizations which qualify for the welfare exemption from property taxation are consumers of bracelets designed to commemorate American prisoners of war where profits are used solely in furtherance of the purposes of such organizations.
Diapers
The sale or use of diapers designed, manufactured, processed, fabricated, or packaged for use by infants, toddlers, and children is exempt from tax.
Menstrual Hygiene Products
The sale or use of menstrual hygiene products, as defined, is exempt from tax.
Qualified Motor Vehicle
Until January 1, 2028, the sale or purchase of motor vehicles for which a grant letter is awarded to the qualified buyer, as defined, under the Clean Cars 4 All Program is partially exempt from tax.
City Of Santa Monica Bike Share Programs
Until January 1, 2025, the sale or use of 500 bicycles purchased by the City of Santa Monica in calendar year 2015 is exempt from tax.
Breast Pumps and Related Supplies
Beginning April 1, 2024, and before April 1, 2029, the sale or use of breast pumps and related supplies are exempt from tax.
Meals, Low-Income Elderly
The sale or use of meals and food products is exempt from tax when furnished to low-income elderly people at or below cost by a nonprofit organization or government entity under a program funded by this state or the United States.
Meals, Elderly Condominium Residents
The sale or use of meals and food products furnished on a regular basis and consumed by people 62 years and older who reside in a condominium, is exempt when such people own equal shares in a common kitchen facility.
Zero-Emission Technology Transit Buses
Until January 1, 2026, the sale or use of specified zero-emission technology transit buses sold to specified public agencies are partially exempt from tax.
Revision December 2025