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Sales tax exemptions for California winemakers

 Behind every great California wine is a sales and use tax exemption.

The California wine industry has been going strong since its inception in the late 1700s. It survived a devastating blight (phylloxera) at the turn of the 19th century and 14 years of Prohibition to become the globally-recognized, award-winning, $30+ billion industry that it is today. It makes 85% of all American wines, is the fourth largest producer in the world, and draws more than 23 million wine enthusiasts to the state annually.

To keep winemakers and vineyard operators happy and productive, the state provides a number of tax incentives. These include:

  • A partial sales and use tax exemption on certain equipment purchases and leases for manufacturers of wine
  • A sales and use tax exemption for raw materials and ingredients (non-food) purchased for incorporating into wine

However, “tax applies to the sales of non-food products or ingredients that are purchased for use in manufacturing or producing the wine and not for the purpose of physically incorporating the item into the finished product.” And food products intended for human consumption are always exempt from California sales and use tax.

Additional information, including record-keeping requirements and how sales tax applies to food and wine tasting events, is available in the California State Board of Equalization’s Sales Tax Guide for Winemakers.

All industries can simplify sales and use tax compliance in all states with sales tax software. Learn more.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.