Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2011
 

Sales And Use Tax Law

CHAPTER 8. ADMINISTRATION

Article 1. Administration

Section 7051

7051. Enforcement by board; rules and regulations. The board shall enforce the provisions of this part and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this part. The board may prescribe the extent to which any ruling or regulation shall be applied without retroactive effect.

Discriminatory ruling invalid.—A ruling which results in exempting one class of sales while taxing another class is discriminatory and invalid unless the classification is made on a rational basis. Maranville v. State Board of Equalization (1950) 99 Cal.App.2d 841.

Reliance upon erroneous ruling.—The state is not estopped from collecting sales taxes because of reliance upon an erroneous ruling by the Board of Equalization. However, the state is estopped from collecting penalties and interest for failure to pay taxes because of such reliance. Market Street Railway Co. v. State Board of Equalization (1955) 137 Cal.App.2d 87.

Suit against discharged bankrupt.—Failure to file bankruptcy claim when there are sufficient funds in bankrupt's estate to pay delinquent sales and use taxes does not bar subsequent action against discharged bankrupt. California State Board of Equalization v. Coast Radio Products (1955) 228 F.2d 520.

Uncertainty in concept of fixtures justifies initial administrative determination.—The difficulty involved in drawing a line of demarcation between fixtures and materials justifies a process of initial administrative determination pursuant to a regulation subject to judicial review. Honeywell, Inc. v. State Board of Equalization (1975) 48 Cal.App.3d 907.

Classification by Board.—A court may not substitute its own policy judgment for that of the board in distinguishing by regulation between fixtures and materials incorporated into a structure in the absence of substantial evidence showing that the classification by the board is arbitrary or capricious or that the classification had no reasonable or rational basis. Oliver and Williams Elevator Corp. v. State Board of Equalization (1975) 48 Cal.App.3d 890.

Interpretation of Regulations by Board.—An administrative agency's interpretation of its own regulations deserves great weight; however, the ultimate resolution of such legal questions rests with the courts. Culligan Water Conditioning v. State Board of Equalization (1976) 17 Cal.3d 86.

Administrative ruling entitled to great weight.—Long-standing tax counsel ruling that nonreusable hospital menus are not meal components under Board Regulation 1503, was entitled to great weight as an administrative interpretation of general application. American Hospital Supply Corp. v. State Board of Equalization (1985) 169 Cal.App.3d 1088 [to the extent this case held that an annotation is entitled to the same weight as a regulation, this case was disapproved in Yamaha Corp. of America v. State Board of Equalization (1998) 19 Cal.4th 1.

Annotations not entitled to the same weight as regulations.—Board annotations are entitled to some consideration by the court, but they are not entitled to the same deference as regulations. Yamaha Corp. of America v. State Board of Equalization (1998) 19 Cal.4th 1.