Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

CHAPTER 1. Taxation Base

Article 1. Taxable and Exempt Property

Section 219

219. Business inventories and exemption. [Repealed by Stats. 1980, Ch. 411, in effect July 11, 1980, operative January 1, 1981.]

Construction.—The expanded exemption (Stats. 1974, Ch. 1441) applies only to business inventories escaping assessment in fiscal year 1975–76 and thereafter. Applying the expanded exemption to escaped assessments meeting the specified conditions which are entered on the 1975–76 tax roll and on tax rolls in ensuing years irrespective of the year of the escape would result in a gift of public funds in violation of Article XVI, Section 6 of the Constitution. California Computer Products, Inc. v. Orange County, 107 Cal.App.3d 731; General Dynamics Corporation v. San Diego County, 108 Cal.App.3d 132

219. Business inventories and exemption. For the 1980–81 fiscal year and fiscal years thereafter, business inventories are exempt from taxation and the assessor shall not assess business inventories.

History.—Added by Stats. 1980, Ch. 411, in effect July 11, 1980, operative January 1, 1981.

Construction.—Replacement spare parts that potentially rotated between the vendor's supply of spare parts and its customers' computer equipment did not qualify as business inventory. The replacement parts were not inventory intended for sale because customers paid no consideration and received any and all replacement parts at no additional cost and the vendor did not treat the pool of spare parts as inventory for income tax and accounting purposes. Amdahl Corp. v. County of Santa Clara, 16 Cal.App.4th 604.

Raw materials.—Cobalt 60 used by a taxpayer for the purpose of irradiating its customers' products did not come within the business inventory exemption. Although de minimis amounts of mass were lost and absorbed into the customers' products in the irradiating process, the cobalt 60 was not an item delivered as part of the provided service. Sterigenics International v. Orange County, 47 Cal.App.4th 1541.