Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales And Use Tax Court Decisions

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Woosley v. State of California . . . (1992)

Use Tax on Vehicles Originally Sold Outside California

In 1976 a California resident purchased an antique vehicle from a private party in North Carolina. When the taxpayer attempted to register the vehicle with the Department of Motor Vehicles, he was required to pay a vehicle license fee and use tax that were higher than the amounts he would have paid had he purchased the vehicle in California. Although the license fee and use tax charges were imposed at uniform rates, the tax base for certain out-of-state purchases of vehicles was calculated differently from the tax base for in-state purchases. As a result, the license fee and use tax were generally higher on out-of-state purchases. The plaintiff filed a class claim and a class action for a refund of the fees and use tax.

The California Supreme Court held that the state had discriminated against interstate commerce by imposing higher license fees on vehicles purchased out of state and by imposing higher use taxes on vehicles purchased from private parties in other states. Such discrimination was not justified by administrative convenience.

The court further held that the failure of the Board to comply with the Administrative Procedures Act did not exempt taxpayers from the obligation to pay taxes as required by state law and could not deprive the state of the tax revenues to which it was entitled. Thus, no refunds were due for use tax arising from private-party transactions after the Board has discontinued its discriminatory practice with respect to such transactions.

Finally, the court held that class claims were not authorized by the legislature during the periods in issue; therefore, all persons who had not filed a timely valid claim for refund should be deleted from the class in this lawsuit. Woosley v. State of California (1992) 3 Cal.4th 758.