Auerbach v. Los Angeles County Assessment Appeals Board No. 2

Opinion

MOSK, J.

INTRODUCTION

Plaintiff and appellant Rick Auerbach, in his capacity as the Los Angeles County Assessor (Assessor), levied, i.e., enrolled,

1

a property tax assessment

[1431]

on a business jet aircraft owned by real party in interest CKE Associates (CKE) that included a hypothetical sales tax as an element of value. CKE appealed the assessment to the respondent Los Angeles County Assessment Appeals Board No. 2 (Appeals Board). The Appeals Board found that CKE’s aircraft was exempt from sales tax based on its use by a common carrier, that the Assessor therefore improperly included the sales tax figure as an element of value, and that the assessment should be reduced accordingly. The Assessor filed a petition for a writ of administrative mandamus in the trial court seeking to overturn the decision of the Appeals Board. The trial court denied the petition.

.On appeal from the judgment of the trial court, the Assessor argues that the use of CKE’s aircraft as an on-demand, unscheduled air taxi did not qualify it for the common carrier exemption from sales tax. In the alternative, the Assessor contends that there is no evidence in the administrative record that CKE’s aircraft was operated in a manner that qualified it for the common carrier exemption as of the January 2004 valuation date.

We hold that (i) the use of CKE’s aircraft as an unscheduled air taxi qualified it under the definition of a common carrier, even though the aircraft was not a commercial aircraft used for scheduled airline operations; (ii) based on its use by a common carrier, CKE’s aircraft was exempt from sales tax; (iii) the Assessor did not carry his burden of proof to show that CKE’s aircraft was not operated by a common carrier as of the January 2004 valuation date; and (iv) an amount attributed to sales tax should not have been included in the Assessor’s valuation of CKE’s aircraft. We therefore affirm the judgment of the trial court.