Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales And Use Tax Court Decisions

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Kuykendall v. State Board of Equalization . . . (1994)

Statutory Procedure for Refund of Unconstitutionally Imposed Sales Tax Is Valid

In Rider v. County of San Diego (1991) 1 Cal.4th 1, the Supreme Court declared unconstitutional the San Diego County Regional Justice Facility Financing Agency supplemental sales and use tax (Jail Tax) because it was not approved by at least two-thirds of San Diego's voters as required under Article XIII A, section 4 of the California Constitution. Plaintiff thereafter filed this consumer class action lawsuit seeking direct reimbursement plus interest to consumers who effectively paid the Jail Tax. During the pendency of this action, the Legislature adopted SB 263 (codified as Revenue and Taxation Code Section 7275 et seq.) which provides a scheme for refunding the illegally collected tax. Three days after the trial court entered judgment for the plaintiff, SB 263 became effective.

The court of appeal held that the legislative scheme for refunds displaced the trial court's refund plan, and that such displacement did not violate the separation of powers doctrine. Kuykendall v. State Board of Equalization (1994) 22 Cal.App.4th 1194.