Crest Brokerage Co. v. County of Los Angeles

Opinion

HANSON, J.— Introduction

On August 25, 1976, plaintiff/respondent Crest Brokerage Company, Inc. (hereinafter Crest) filed a complaint for recovery of ad valorem property taxes for 1975 which it paid under protest naming as defendants City and County of Los Angeles (hereinafter referred to collectively as Los Angeles).

On March 16, 1977, the court below granted plaintiff Crest’s motion for summary judgment, awarding plaintiff $8,818.79 as principal, $187 as interest and costs of $58.50 for a total sum of $9,064.29.

[637]Defendant Los Angeles appeals from the summary judgment in favor of plaintiff Crest.

Chronology of Relevant Events

We trace in chronological order the statutory and case law which impacts on and is relevant to the case at bench.

Prior to January 14, 1976, imported goods which remained in the original package or container, as present here, could not be subject to state taxes. The United States Supreme Court in Brown v. State of Maryland (1827) 25 U.S. (12 Wheat.) 419 [6 L.Ed. 678], stated that goods imported “while remaining the property of the importer, in his warehouse, in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports to escape the prohibition in the constitution.” (Id., at p. 442 [6 L.Ed. at p. 686].) In further interpretation of the import-export clause of the Constitution, the court held that states were prevented from imposing nondiscriminatory ad valorem property taxes on imported goods until they have lost their character as an import and have become incorporated into the mass of property in the state. (Low v. Austin (1872) 80 U.S. (13 Wall.) 29 [20 L.Ed. 517].)

On January 14, 1976, the United States Supreme Court issued its opinion in Michelin Tire Corp. v. Wages (1976) 423 U.S. 276 [46 L.Ed.2d 495, 96 S.Ct. 535], expressly overruling Low and allowing states to apply nondiscriminatory ad valorem property taxes on imported goods. Crest, which imports goods from foreign countries, prior to Michelin filed for and was granted by Los Angeles immunity from ad valorem property taxes on its imported goods.

After January 14, 1976, the Los Angeles County Tax Assessor levied ad valorem property taxes against Crest for the tax year 1975 pursuant to Revenue and Taxation Code section 531. Crest paid the tax bill of $8,818.79 under protest.