California Institute of Technology v. Johnson

SCHOTTKY, J. pro tem.

Appellant is an educational institution of collegiate grade within the State of California, and not conducted for profit. In 1936 it purchased certain telescope and other equipment outside of California, and brought the same into this state to be used by it exclusively for purposes of education. The State Board of Equalization determined that there was a tax liability of $3,877.24 upon said purchases under the Use Tax Act of 1935, and said amount with interest in the sum of $106.82 was paid by appellant to the state under protest. Thereafter appellant brought suit against respondent state treasurer to recover said amount, and this appeal is from the judgment of the trial court sustaining respondent’s demurrer to appellant’s complaint.

The sole question to be determined upon this appeal is: Is an educational institution of collegiate grade, -within the State of California, not conducted for profit, which purchases and uses tangible personal property exclusively for purposes of education, exempt from the payment of use taxes under the provisions of the Use Tax Act of 1935, and section la of article XIII of the Constitution of the State of California? . Section 4 of the Use Tax Act of 1935 (Stats. 1935, p. 1297 [Deering’s Gen. Laws, Act 8495a]), provides:

“The storage, use or other consumption in this State of the following tangible personal property is hereby specifically exempted from the tax imposed by this act: . . .

“(b) Property, the storage, use or other consumption of which this State is prohibited from taxing under the Constitution or laws of the United States of America or under the Constitution of this State.”

[858]

Section la of article XIII of the Constitution of the State of California provides:

“Any educational institution of collegiate grade, within the State of California, not conducted for profit, shall hold exempt from taxation its buildings and equipment, its grounds within which its buildings are located, not exceeding one hundred acres in area, its securities and income used exclusively for the purposes of education.”

Appellant concedes that under the authority of

Douglas Aircraft Co., Inc.,