Estate of Morris

THOMPSON, J.

The State of California has appealed from an order of the Probate Court of Los Angeles County in the Estate of Charles Henry Morris, deceased, refusing to direct the payment as a priority claim, of sales taxes due to the state under the provisions of the California Retail Sales Tax Act. (Stats. 1933, p. 2599; Deering’s Gen. Supp. Laws, 1933, p. 2360, Act 8493.)

Charles Henry Morris died at Los Angeles October 5, 1932, possessed of real and personal property, including a printing business enterprise, together with stock on hand, which was sold to its customers at retail. An administratrix of his estate was duly appointed and qualified. On application to the court, the estate was authorized under section 572 of the Probate Code to operate the business pending the administration of the estate. In carrying on the business the administratrix made sales of tangible personal property prior to May, 1935, rendering the estate liable for the payment of sales taxes in the sum of $603.44, which were not paid. Upon citation to show cause why said taxes should not be paid forthwith as a preferred claim, the court adopted findings and made an order, May 15, 1935, to the effect that said sum was due and owing from the estate to the State of California as necessary “expenses of administration”, and directed that it be paid in due course of administration. The appellant’s application to allow the sales taxes as a

preferred claim,

and to direct its immediate payment was denied. Prom that order the state has appealed. The respondent has filed no brief on appeal.

The only question to be determined is whether taxes due from an estate for retail sales of intangible personal property in the course of operating a business belonging to the estate under the provisions of section 572 of the Probate Code is a preferred claim payable pursuant to section 9 of the California Retail Sales Tax Act, or whether it should

[157]

be paid only as ordinary expenses incurred in due course of administration.

We are of the opinion the retail sales taxes which were found to be due from the estate are not to be.classified merely as ordinary expenses of administration. On the contrary, they constitute an excise tax imposed by the state for the privilege of conducting a business and for selling at retail tangible personal property.