Beneficial Standard Life Insurance v. State Board of Equalization

[19]

SCHOTTKY, J.

Beneficial Standard Life Insurance Company has appealed from an adverse judgment in an action it brought to obtain a refund of California use taxes assessed by the State Board of Equalization and which were paid under protest.

The facts which were agreed upon are: Plaintiff, Beneficial Standard Life Insurance Company, at all times herein mentioned was a life insurance company incorporated under the laws of the State of California. During the period of July 1, 1947, through June 30, 1955, the plaintiff sold tangible personal property, the gross receipts from the sale of which were $445,013.17. There were approximately one hundred such items of tangible personal property sold during said period, consisting primarily of Cadillac automobiles which were purchased by plaintiff outside the State of California and sold by plaintiff to individual purchasers who took delivery in the State of California for use in this state. In all instances title passed to plaintiff’s vendees within this state. No sales taxes were paid at the time of said sales, and plaintiff did not collect use taxes from the vendees. There were assessed upon these transactions $13,279.56 taxes, $2,373.81 interest, and $1,327.96 penalty, totaling $16,981.33. The sum of $16,981.33 was paid to defendant State Board of Equalization on December 7, 1956, which payment was made under protest and was accompanied by a claim for refund. Plaintiff contends there is now due and owing plaintiff from defendant State Board of Equalization the sum of $16,981.33, together with interest thereon at 6 per cent per annum from the date of payment.

The evidence produced at the trial disclosed that in 1948 4 automobiles were sold; in 1949 there were 4 sold; in 1950 there were 5 sold; in 1951 there were 13; in 1952 there were 12; in 1953 there were 18; in 1954 there were 36; and for the half-year 1955 there were 28. Of this total of 120 transactions 104 transactions were taxed. It should be noted that 75 of the automobiles sold were cars used directly in plaintiff’s business. Forty-five were brand-new cars which were purchased and then sold immediately to persons connected with the company who thereby obtained the cars at the company’s fleet price. Over the 8-year period, July 1948 through June 1955, there were 76 sales of furniture, which furniture had been used in plaintiff’s business. Over the 8-year period there were 14 sales of used furniture in 1948; 15 sales in 1949;