Justia California Court of Appeals Opinion Summaries

The county seized and sold residential property that was in default on property taxes. Sale proceeds exceeded the tax delinquency. Carloss, the son of the deceased former resident of the property, made a claim under Rev. & Tax. Code, 4675(a), (e)(1)(B), (f), which permits a “person with title of record” to tax-defaulted property or the person’s successor to claim sale proceeds in excess of the tax liability. Carloss’s mother was listed as the property owner in county tax records and had lived in the house for over 50 years. The county denied the claim because no deed appears in the county records, reasoning that title of record can be established only with a recorded deed. The trial court found the action time-barred, as not filed within 90 days of the administrative decision. The court of appeal reversed, finding the action timely and that a recorded grant deed is not the exclusive means of proving title of record. While proving title may be difficult in the absence of such a deed, in unusual circumstances such as Carloss alleged, title of record may be established by various recorded instruments, assessor’s records, and testimony that, as a whole, proves that the claimant or the claimant’s predecessor in interest held title of record. View "Carloss v. County of Alameda" on Justia Law

The manufacturer sells telecommunications equipment to telephone companies, which pay for the equipment, written instructions on using the equipment, a copy of the computer software that makes the equipment work, and the right to copy that software onto the equipment’s hard drive and use the software to operate the equipment. An almost identical transaction was previously found to satisfy the requirements of California’s technology transfer agreement statutes (Rev. & Tax. Code 6011(c)(10) & 6012(c)(10)), so that the manufacturer was responsible for paying sales taxes only on tangible portions of the transaction (equipment and instructions), but not the intangible portions (software and rights to copy and use it). The State Board of Equalization nonetheless assessed a sales tax. The manufacturer paid the taxes and sought a refund. The court of appeal held that the Board’s assessment of the sales tax was erroneous. The manufacturer’s decision to give the telephone companies copies of the software on magnetic tapes and compact discs (rather than over the Internet) does not turn the software or the rights to use it into “tangible personal property” subject to the sales tax. View "Lucent Techs., Inc. v. State Bd. of Equalization" on Justia Law

In 2013, defendant-respondent, City of Ontario, with the consent of defendant-respondent, City of Rancho Cucamonga, established the Greater Ontario Tourism Marketing District (the GOTMD). The GOTMD was comprised of all lodging businesses operating in the two cities, and its mandate was to market and promote the businesses as "tourist, meeting and event destinations" with assessments imposed on the businesses based on their room rates and rental volumes. Plaintiff-appellant, The Inland Oversight Committee (IOC), sued the cities to invalidate the assessments on the ground they were a "tax" that was not approved by a majority or supermajority of the cities' voters as article XIII C of the California Constitution required. IOC claimed the assessments were either a general tax requiring majority voter approval or a special tax requiring supermajority voter approval. The trial court sustained demurrers, without leave to amend, on the ground that neither IOC nor any of its members had standing to challenge the validity of the assessments. IOC appealed. The cities filed a motion to dismiss the appeal along with their respondent's brief, claiming that the Court of Appeal lacked jurisdiction to consider the merits of IOC's appeal because IOC's notice of appeal was filed more than 30 days after the judgment was entered. The Court of Appeal agreed that IOC's notice of appeal was untimely filed, and it accordingly lacked jurisdiction to consider the merits of the appeal. View "Inland Oversight Com. v. City of Ontario" on Justia Law

Taxpayer brought a mandamus action to compel state officials to collect the gross premium tax from Real Parties. At issue was whether Real Parties are "insurers" under the California Constitution's gross premium tax provision. The trial court sustained Real Parties' demurrers without leave to amend. The court concluded, however, that pursuant to People ex rel. Roddis v. California Mut. Assn., the taxpayer can maintain this action because the complaint alleges facts sufficient to support an inference that indemnifying against future contingent medical expenses represents a significant financial proportion of Real Parties’ businesses. Accordingly, the court reversed the judgment. View "Myers v. St. Bd. of Equalization" on Justia Law

Plaintiff challenged the Appeals Board's denial of his application for a refund of property taxes paid to the County relating to a ground lease and a hangar at the Santa Monica Municipal Airport. The trial court granted summary adjudication with respect to the hangar and subsequently ruled in favor of plaintiff with respect to the ground lease. The County appealed. The court concluded that, with respect to the ground lease, the lease affords plaintiff a private benefit - the exclusive right to store his aircraft and equipment on the leased premises - that is sufficiently independent of the interests retained by Santa Monica to constitute a taxable possessory interest. In regard to the hangar, Revenue and Taxation Code section 107, subdivision (b) defines possessory interests to include “Taxable improvements on tax-exempt land.” Therefore, the court concluded that the trail court improperly granted summary adjudication because the County’s evidence raised a triable issue as to whether the hangar fits this definition. The court reversed and vacated the post-judgment orders. View "Seibold v. County of Los Angeles" on Justia Law

Great Oaks, a water retailer, challenged a groundwater extraction fee imposed on water it draws from wells on its property. The power to impose such a fee is statutorily vested in the Santa Clara Valley Water Management District. The trial court awarded a refund of charges paid by Great Oaks, finding that the charge violated the provisions of both the District Act and Article XIII D of the California Constitution, which imposes procedural and substantive constraints on fees and charges imposed by local public entities. The court of appeal reversed, holding that the fee is a property-related charge for purposes of Article 13D, subject to some constraints, but is also a charge for water service, exempt from the requirement of voter ratification. A pre-suit claim submitted by Great Oaks did not preserve any monetary remedy against the District for violations of Article 13D and, because the matter was treated as a simple action for damages when it should have been treated as a petition for a writ of mandate, the trial court failed to apply a properly deferential standard of review to the question whether the District’s setting of the fee, or its use of the resulting proceeds, complied with the District Act. View "Great Oaks Water Co. v. Santa Clara Valley Water Dist." on Justia Law

Costco withheld federal and state payroll taxes from plaintiff's award for lost wages. The trial court, under Lisec v. United States, ruled that the withholding was improper and denied Costco's motion for acknowledgment of satisfaction of the judgment. The court noted that in the 23 years since Lisec, the IRS and the vast majority of federal appellate courts have broadly interpreted the applicable Internal Revenue Code (IRC) provisions as requiring an employer to withhold payroll taxes for all "wages" arising from the employer-employee relationship, even after that relationship has terminated. Therefore, the court adopted this prevailing view and concluded that Costco properly withheld the payroll taxes. The court reversed and remanded with instructions. View "Cifuentes v. Costco Wholesale Corp." on Justia Law

Harley-Davidson, Inc. and several of its subsidiaries sued the Franchise Tax Board for a tax refund. The trial court sustained the Board's demurrer to Harley-Davidson's commerce clause challenge to Revenue and Taxation Code provisions that allowed intrastate unitary businesses to choose annually whether to compute their tax using the combined reporting method or the separate accounting method but required interstate unitary businesses to compute their tax using only the combined reporting method. After review of the Board's arguments on appeal, the Court of Appeal concluded the trial court erred in sustaining the demurrer because the statutory scheme facially discriminated on the basis of an interstate element in violation of the commerce clause. The Court reversed the judgment in that respect and remanded to the trial court to determine in the first instance whether the taxation scheme withstands strict scrutiny (that is, whether it "'advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.'") On a separate issue, the trial court determined after a bench trial that two Harley-Davidson subsidiaries were taxable by California during the tax years 2000 through 2002. Harley-Davidson argued the trial court erred by finding those subsidiaries bore a sufficient nexus to this state to overcome due process and commerce clause limitations on taxing foreign entities. The Court of Appeal disagreed on this and affirmed the judgment. View "Harley-Davidson v. Franchise Tax Bd." on Justia Law

When parties discharge waste that could affect the quality of California’s water they must pay a permit fee set by the State Water Resources Control Board, Wat. Code, 13260. In 2011, two of the five Board seats were vacant; two of the remaining three members approved an increase of fees for the 2011-2012 fiscal year. CBI argued that section 183 required the fees to be approved by a majority of the five-person Board and that the increase was an illegal tax because the fee imposed on the dischargers in the storm water program (one of eight areas in the permit program) exceeded the cost of regulating this particular program. The court of appeal upheld the fee; section 181, not section 183, applied to adoption of the fee schedule and the vote by a majority of the Board’s quorum complied with section 181. Section 13260 requires that the total fees collected from all waste dischargers must equal the costs of regulating the entire waste discharge permit program. View "Cal. Bldg. Indus. Ass'n v. State Water Res. Control Bd." on Justia Law

Great Oaks, a water retailer, challenged a fee imposed on water it draws from wells on its property. The power to impose such a fee is vested in the Santa Clara Valley Water Management District under the Santa Clara County Water District Act, to prevent depletion of the acquifers from which Great Oaks extracts water. The trial court awarded a refund of charges paid by Great Oaks, finding that the charge violated the provisions of the District Act and Article XIII D of the California Constitution, which imposes procedural and substantive constraints on fees and charges imposed by local public entities. The court of appeal reversed, finding that: the fee is a property-related charge for purposes of Article 13D and subject to some of the constraints of that enactment; it is also a charge for water service, and, therefore, exempt from the requirement of voter ratification; pre-suit claims submitted by Great Oaks did not preserve any monetary remedy against the District for violations of Article 13D; and the court failed to apply a properly deferential standard of review to the question whether the District’s setting of the fee, or its use of the resulting proceeds, complied with the District Act. View "Great Oaks Water Co. v. Santa Clara Valley Water Dist." on Justia Law