Yosemite Portland Cement Corp. v. State Board of Equalization

PETERS, P. J. The Yosemite Portland Cement Corporation brought this proceeding for the purpose of compelling the State Board of Equalization to approve its claim for a refund of retail sales taxes paid by it under protest.

After overruling the demurrer of respondents, the trial court, by peremptory writ of mandate, ordered the board to refund or to credit the petitioner with the sum of $2,017.07 found to have been illegally collected from it. The board, its members, and other state officers and agencies named in the petition, appeal.

The taxes involved were assessed against the Yosemite company based upon its gross receipts from sales of cement to a department of the city and county of San Francisco known as the Heteh Hetchy Project. This cement was sold to the Hetch Hetchy Project under the following circumstances : On May 3, 1932, the electorate of San Francisco approved a bond issue in the sum of $6,500,000 to complete the Heteh Hetchy water project. One part of the work contemplated was the construction of the Coast Range tunnel. The city submitted that construction work to competitive bidding. Several private contractors and the Hetch Hetchy Project submitted bids. Under §95 of the charter of the city and county of San Francisco departments of the city are allowed to bid on such projects. Bids were opened in June of 1932 and the Hetch Hetchy Project was the lowest bidder. In August of 1932 the contract for the construction of the [41]tunnel was awarded the Hetch Hetehy Project. Sometime after August 1, 1933, certain quantities of cement were sold by the Yosemite company to the Hetch Hetehy Project for use in the performance of the contract awarded the project. The gross receipts from these sales were taxed by the board, were paid by the company under protest, and after a claim for refund had been denied, this petition was filed.

The controversy as to whether these sales were subject to the act turns upon the correct interpretation of §5 of the Retail Sales Tax Act of 1933 which became effective on August 1st of that year (Stats, of 1933, chap. 1020, p. 2599 ; Deering’s Gen. Laws, 1937, Act 8493). So far as pertinent here, §5 reads as follows:

“There are hereby specifically exempted from the provisions of this act . . . the following: . . .

“(d) The gross receipts from sales of tangible personal property used for the performance of a contract on public works executed prior to the effective date of this act.”