Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017

Revenue and Taxation Code

Property Taxation

Part 1. General Provisions

Chapter 1. Construction

Section 103

103. "Property." "Property" includes all matters and things, real, personal, and mixed, capable of private ownership.

Manufacturer's interest in products being fabricated.—A manufacturer's possessory interest in products which it is fabricating for the Federal Government, title vesting in the Government as progress payments are made, is not subject to taxation. Since the only use which the manufacturer can make of such products is exclusively for the benefit of the owner, the possessory interest does not constitute property. Douglas Aircraft Co. v. Byram, 57 Cal.App.2d 311.

Franchises.—So-called "special franchises" granted public utilities have been held property subject to taxation. San Jose Gas Co. v. January, 57 Cal. 614; Spring Valley Water Works v. Schottler, 62 Cal. 69, aff'd 110 U.S. 347; Stockton Gas & Electric Co. v. San Joaquin County, 148 Cal. 313; Kern River Co. v. Los Angeles County, 164 Cal. 751; Western Union Telegraph Co. v. Hopkins, 160 Cal. 106; Postal Telegraph Cable Co. v. City of Los Angeles, 164 Cal. 156. But cf. Spring Valley Water Works v. Barber, 99 Cal. 36, holding that a right granted a utility by general county ordinance to lay pipes under the public roads of the county was not taxable as a franchise.

Advances.—A bank account arising from money advanced to a corporation by the United States to provide the corporation, which acted as an independent contractor, with necessary funds to perform a government cost-plus-a-fixed-fee contract is the property of the corporation and is to be taxed to it as a solvent credit even through United States retained a lien superior to all other liens on the balance in the account to secure repayment of the advances under certain contingencies, the account could be used only for the purposes of the contract, withdrawals from the account were subject to the previous approval of the government contracting officer and the balance remaining in the account would be returned to the United States should it elect to terminate the contract. Timm Aircraft Corp. v. Byram, 34 Cal.2d 632.