Was food-grade white mineral oil exempt from Florida pollutants tax when sold for food, cosmetic, or pharmaceutical uses?

Subject

Pollutants Tax/White Mineral Oil

Plain-English summary

Five documented sales of food-grade white mineral oil to food, cosmetic, and pharmaceutical businesses were exempt from Florida pollutants tax. Although the product was a petroleum distillate, Florida's pollutant definition excluded products intended for application to the human body, personal hygiene, or human ingestion.

The manufacturer's specifications showed qualifying food-contact, cosmetic, and pharmaceutical uses, and the submitted invoices documented the five customers' industries. The Department limited the advisement to those sales and said sales to persons outside those industries remained taxable.

What this means for you

The product's composition alone did not control. Intended human use and transaction-level documentation were necessary, and the ruling did not create a blanket exemption for all white mineral oil.

Common questions

Q: Was white mineral oil always exempt? No.

Q: Which sales qualified? The five documented food, cosmetic, and pharmaceutical sales.

Q: Were other sales taxable? Yes.

Citations and references

• Fla. Stat. § 206.9925(5) — pollutant definition and human-use exclusion
• Fla. Stat. § 206.9935(1) — pollutants-tax imposition
• 21 C.F.R. §§ 172.878 and 178.3620(a) — white mineral oil food uses
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01B5-001

Original ruling text

TAA 01B5001
SUMMARY
QUESTION: Is white mineral oil subject to pollutants when sold to companies engaged in the food, cosmetic, or
pharmaceutical industries?
ANSWER - BASED ON FACTS BELOW: White mineral oil is a petroleum product. Sales of petroleum products are
normally subject to pollutants tax. However, sales of products intended for application to the human body or for use in
human personal hygiene or for human ingestion are not defined as pollutants, regardless of their contents. Sales of
white mineral oil, documented by invoices reflecting that purchasers are businesses engaged in the food, cosmetic,
and pharmaceutical industries are exempt from pollutants tax. The exemption is granted on a case-by-case basis.

[[April 10, 2001]]

Re:Technical Assistance Advisement #01B5-001
XXX (hereinafter referred to as "Product")
XXX (hereinafter referred to as "Taxpayer")
XXX (hereinafter referred to as "Manufacturer")
XXX (hereinafter referred to as "Customer 1")
XXX (hereinafter referred to as "Customer 2")
XXX (hereinafter referred to as "Customer 3")
XXX (hereinafter referred to as "Customer 4")
XXX (hereinafter referred to as "Customer 5")
<>
Dear :
Your letter of October 25, 2000, requested a Technical Assistance Advisement on the application of the pollutants tax
to the above referenced matter. This response to your request constitutes a Technical Assistance Advisement under
Chapter 12-11, Florida Administrative Code, and is issued to you under the authority of s. 213.22, Florida Statutes.
ISSUE
The issue is whether Product, when sold by Taxpayer to Florida customers, is subject to Florida Pollutants Tax.
FACTS AS PRESENTED
As stated in your letter:
[Taxpayer] imports [Product] into Florida, warehouses the product and distributes the product to companies in

Florida....
Taxpayer is located in Florida. Taxpayer purchases Product from Manufacturer, which is located in another state.
Taxpayer resells Product to Florida customers.
TAXPAYER'S ARGUMENT
As is also stated in your letter:
... Attached are several invoices to customers who purchase this product. These companies use [Product] as follows:
[Customer 1, Customer 2, Customer 3, and Customer 4] use the [Product] in cosmetic formulations such as hair gels,
skin creams and lotions. These 4 accounts manufacture products for the cosmetic industry. They use this particular
grade of [Product], because it is considered safe to be used in contact with the human body. It is used as a carrier for
aeromatic oils (massage oils) because it breaks down the viscosity of the oils. [Product] is the trade name and has
been approved by the Food & Drug Administration for such use.
Customer 5 uses Product as a carrier for the waxes that go on vegetables (i.e. celery).
Based on these facts, we hope that you will agree that Product should be listed as an exemption from the list of
petroleum distillates that are normally charged a pollutants tax.
LAW AND DISCUSSION
This Technical Assistance Advisement will contain information provided in a Letter of Technical Advice issued to
another representative of your company on November 20, 2000.
The specification sheet for Product issued by Manufacturer, which Taxpayer provided to the Department by FAX on
October 9, 2000, reflects that:
[Products] are food grade white mineral oils of highest purity. They meet or exceed requirements set forth in the U.S.
FDA regulations 21 CFR 172.878 and 178.3620(a) for direct and indirect food contact and surpass standards of the
US Phormacopeia (USP) and the National Formulary (NF), and have also been authorized as H1 and 3H lubricants in
food plants under the jurisdiction of the USDA.
Features
Refined to the highest degree of purity in a petroleum oil
All grades contain Vitamin E oxidation inhibitor
Available in a wide range of viscosity grades
Certified as Kosher with the Union of Orthodox Jewish Congregations of America
Applications
*Cosmetics & pharmaceutical C base for ointments C suntan lotions C baby oils

Fibers, plastics and resins C process aid, diluent C textile fiber processing
Food Processing C defoamer C bakery pan oil/dough divider oil
*Coating for fruit and vegetables C egg Shell sealant C food machinery lubricant . . .
Note: All oils above are colorless (Saybolt +30 Color), odorless and tasteless and surpass requirements of FDA and
U.S. Pharmacopeia standards for Neutrality, Sulfur Compounds, Solid Paraffins and Carbonizable Substances....
Section 206.9925(5), Florida Statutes (F.S.), defines the term "pollutants" to mean in pertinent part:
... any petroleum product as defined in subsection (4)...; but the term excludes liquefied petroleum gas, medicinal oils,
and waxes. Products intended for application to the human body or for use in human personal hygiene or for human
ingestion are not pollutants, regardless of their contents....
Section 206.9935(1), F.S., provides further:
(1)(a)1. There is hereby levied an excise tax for the privilege of producing in, importing into, or causing to be imported
into this state pollutants for sale, use, or otherwise.

2. The tax shall be imposed only once on each barrel of pollutant, other than petroleum products, when first produced
   in or imported into this state. The tax on pollutants first imported into or produced in this state shall be imposed when
   the product is first sold or first removed from storage. The tax shall be paid and remitted by any person who is
   licensed by the department to engage in the production or importation of motor fuel, diesel fuel, aviation fuel, or other
   pollutants.
3. The tax shall be imposed on petroleum products and remitted to the department in the same manner as the motor
   fuel tax imposed pursuant to s. 206.41....
   A Material Safety Data Sheet (MSDS), which was issued by Manufacturer for the Product, was provided by Taxpayer.
   "SECTION 15; REGULATORY INFORMATION" of the MSDS contains the following statement:
   ... This product contains "Petroleum Distillates" which may require special labeling if distributed in a manner intended
   or packaged in a form suitable for use in the household or by children. Precautionary label dialogue should display
   the following: "Contains Petroleum Distillates! May be harmful or fatal if swallowed! KEEP OUT OF REACH OF
   CHILDREN!";....
   The "Emergency Overview" section of the MSDS contains the statement:
   ... Not intended for human ingestion.
   "SECTION 3: HAZARDS IDENTIFICATION" of the MSDS provides:
   Prolonged and repeated contact can cause mild skin irritation and inflammation characterized by drying, cracking
   (dermatitis) or oil acne.

Based on the statements, "Not intended for human ingestion!"; "This product contains "Petroleum Distillates'"; "May be
harmful if swallowed!"; and, because the product would cause skin irritations with repeated or continued use, it is
reasonable to determine that [Product] is subject to Florida pollutants tax as a petroleum product which is not intended
for either human ingestion or for application to the human body.
However, the MSDS also provides, in "SECTION 1; IDENTIFICATION" that [Product] is assigned the synonym,
"Food-grade White Mineral Oil." "SECTION 15; REGULATORY INFORMATION" provides additionally:
This product contains the following components in concentrations above de minimis levels that are listed as toxic
chemicals in 40 CFR Part 372 pursuant to the requirements of Section 313 of SARA: No components were identified.
Based on the information reviewed, the product is either suitable for human ingestion or for application to the human
body, or it is a pollutant having a character that imposes a danger to both humans and the environment. Chapter 21,
Code of Federal Regulation, Part 172, Section 878 shall be used for guidance regarding the imposition of pollutants
tax on the importation or production of "white mineral oil." Such section provides:
Sec. 172.878 White mineral oil.
White mineral oil may be safely used in food in accordance with the following conditions:
(a)White mineral oil is a mixture of liquid hydrocarbons, essentially paraffinic and naphthenic in nature obtained from
petroleum.
(1)It meets the test requirements of the United States Pharmacopeia XX (1980) for readily carbonizable substances
(page 532).
(2)It meets the test requirements of U.S.P. XVII for sulfur compounds (page 400).
(3)It meets the specifications prescribed in the "Journal of the Association of Official Analytical Chemists," [Page
101]...
(b)White mineral oil may contain any antioxidant permitted in food by regulations issued in accordance with section
409 of the Act, in an amount not greater than that required to produce its intended effect.
(c)White mineral oil is used or intended for use as follows:
(1)As a release agent, binder, and lubricant in or on capsules and tablets containing concentrates of flavoring, spices,
condiments, and nutrients intended for addition to food, excluding confectionery.
(2)As a release agent, binder, and lubricant in or on capsules and tablets containing food for special dietary use.
(3)As a float on fermentation fluids in the manufacture of vinegar and wine to prevent or retard access of air,
evaporation, and wild yeast contamination during fermentation.
(4)As a defoamer in food.
(5)In bakery products, as a release agent and lubricant.
(6)In dehydrated fruits and vegetables, as a release agent.
(7)In egg white solids, as a release agent.
(8)On raw fruits and vegetables, as a protective coating....

A note found on a fact sheet for Product, and issued by Manufacturer on the Manufacturer's website specifies that:
All oils above are colorless (Saybolt +30 Color), ordorless and tasteless and surpass requirements of FDA and U.S.
Pharmacopeia standards for Neutrality, Sulfur Compounds, Solid Paraffins and Carbonizable Substances.
The fact sheet reflects further:
[Products] are food grade white mineral oils of highest purity. They meet or exceed requirements set forth in the U.S.
FDA regulations 21 CFR 172.878 and 178.3620 (a) for direct and indirect food contact and surpass standards of
either the National Formulary (NF) or US Pharmacopeia (USP), and meet the requirements to be certified as H1
lubricants in food plants under the jurisdiction of the USDA.
Additionally, the fact sheet provides that Product is also used by the cosmetics and pharmaceutical industries as a
base for ointments, suntan lotions and baby oils.
CONCLUSION
Under the conditions specified by the fact sheet, it is determined that the sale of white mineral oil which meets the
requirements of Chapter 21 CFR 172.878 and 178.3620 is exempt from pollutants tax when sold by Taxpayer to
customers who are engaged in the food, cosmetic, and pharmaceutical industries. The invoices you provided with
your letter of October 25, 2000, in conjunction with the statement that Customers 1 through 5 are engaged in such
industries, act to document the exemption provided. This Technical Assistance Advisement is issued solely, and
limited exclusively, to those five documented sales.
Because all evidence provided reflects that Product is a petroleum distillate, and is defined as a "pollutant"
under Florida law (except when applied to or ingested by the human body), it is further determined that sales
of Product to persons that are not engaged in the food, cosmetic or pharmaceutical industries are sales of a
pollutant which is subject to Florida pollutants tax.
This response constitutes a Technical Assistance Advisement under 213.22, F.S., which is binding on the Department
only under the facts and circumstances described in the request for this advice as specified in 213.22, F.S. Our
response is based on those facts and the specific situation summarized above. You are advised that subsequent
statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this advice is
based may subject similar future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public records under
Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential
information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, the backup material and this
response, deleting names, addresses and any other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 15 days of the date of this letter.

Sincerely,
Lynwood Taylor
Tax Law Specialist
Technical Assistance
and Dispute Resolution
(850) 922-4725
LNT/lt
Con. #:44155