Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales And Use Tax Court Decisions
Diamond National Corp. v. State Board of Equalization . . . (1976)
Plaintiffs were the sellers of business forms to a chartered national bank and the bank itself. The Board had collected sales tax from the sellers on sales of printed forms and other personal property to the bank. Plaintiffs contended that the legal incidence of the tax was on the bank and that, since the bank was exempt from the payment of sales tax under federal and state law, tax could not be applied to the sales. Despite uniform interpretation by California courts that the incidence of the sales tax is on the seller, the United States Supreme Court reversed the California Court of Appeal and found that the incidence of tax fell illegally upon the purchasing national bank. (The federal law was changed effective after the period involved in the case to permit the application of tax to sales to national banks.) Diamond National Corp. v. State Board of Equalization (1976) 425 U.S. 268, 47 L.Ed.2d 780.