San Diego Electric Railway Co. v. State Board of Equalization

ADAMS, P. J. Appellant San Diego Electric Railway Company is a corporation engaged in the transportation of passengers by streetcar and by bus in the city of San Diego. Five of its bus lines extend for short distances beyond the incorporated limits of the city. The State Board of Equalization, hereinafter referred to as the board, imposed motor vehicle transportation license taxes upon the total fares paid by passengers who in one continuous trip on such buses traversed city streets as well as public highways outside incorporated territory. Appellant paid the tax for the month of August, 1945, under protest and brought this action for the recovery of a portion thereof, claiming that under the relevant statutes it should be required to pay such tax only upon the portion of such fares attributable to transportation of such passengers outside incorporated areas—in other words, that the tax statutes should be interpreted to require an apportionment of the fares received from passengers who, in one continuous trip, traversed public highways both outside and inside incorporated areas, in accordance with the ratio between the distance traveled in the unincorporated territory to the whole distance traveled.

The trial court rendered judgment for the board and this appeal followed.

So far as relevant, the substance of the applicable statutes is as follows:

A license tax at the rate of 3 per cent of the gross receipts (Rev. & Tax. Code, § 9651) is imposed upon any person engaged in the transportation of persons or property for hire or compensation by or upon a motor vehicle upon any public highway in the state (Rev. & Tax. Code, § 9603).

Gross receipts are to include all receipts from the operation of motor vehicles entirely within the state, and a proper[269]tion, based on mileage, from interstate operations (Rev. & Tax. Code, § 9606).

Section 9652 of said code reads:

‘ ‘ For the purpose of the proper administration of this part and to prevent evasion of the tax it shall be presumed that the gross receipts from all operations of operators are subject to the tax until the contrary is established.”

Section 9653 (with which this appeal is particularly concerned), provides:

“Operators and receipts exempted. This part does not apply to operators of motor vehicles operated exclusively within incorporated cities or between incorporated cities or incorporated cities and private property where no portion of the public highway outside the corporate limits of the cities is traversed in such operation.