Texaco, Inc. v. County of Los Angeles

Opinion

KINGSLEY, Acting P. J.

Plaintiff appeals from an adverse judgment in an action for refund of taxes. We affirm.

The instant case involves the validity of the tax assessed upon an oil refinery owned and operated by plaintiff, Texaco, Inc. The trial court sustained an order of the county assessment appeals board which had approved the assessment method used by the county assessor, which resulted in an assessed value of $155,147,000 whereas plaintiff contended, and here contends, the value should have been substantially less.

It is, of course, basic law that property should be assessed at its • “market value.” However, when dealing with a large and complicated piece of industrial property such as is here involved, it is admitted that there cannot be a “market value” in the usual sense, since oil refineries are not the subject of open market sales. The dispute here involves the assessment of the operating plant—it being agreed that the underlying land may be assessed by normal methods. As we read the briefs, the parties agree that the underlying method for evaluating the market value of the plant is to start with its original cost, appreciate that cost by a factor of inflation to arrive at the hypothetical costs of replacement on the lien date, and then depreciate the amount so arrived at by a factor taking into account both the depreciation attributable to normal wear and tear and a factor taking into account the fact that a plant such as here involved has suffered depreciation in value because of obsolescence caused by technological advances in the industry. In other words, no one would build, or buy, at present construction costs, the present plant even if it was now to be rebuilt in its present form.

I

The case before us is distinguishable from

Hunt-Wesson Foods, Inc.

v.

County of Alameda

(1974) 41 Cal.App.3d 163 [116 Cal.Rptr. 160];

[63]

Bret Harte Inn, Inc.

v.

City and County of San Francisco