Tax Update for California’s Wine Industry

As a result of a very recent change to a legal interpretation that dates back to 1961, viable yeast used in the production of wine is no longer considered to be subject to sales or use tax in California. The Board of Equalization has historically considered wine yeast to be taxable because it doesn’t all remain in the final product. Therefore, yeast was considered to be consumed by the wine producer in the production process. That interpretation, however, was inconsistent with rulings that considered beer yeast to be exempt, and it overlooked the fact that the presence of wine yeast during the fermentation process is instrumental […]