Approved 2000 Minutes - Tuesday November 28, 2000

The Board met at its offices at 5901 Green Valley Circle, Culver City, at 9:05 a.m. with Chairman Andal and Mr. Klehs present and Ms. Mandel present on behalf of Dr. Connell in accordance with Government Code Section 7.9.

BUSINESS TAXES HEARINGS

Ronald L. & Rena Rae Ford, SR EH 23-774357-010; 89000412760

1-1-94 to 6-30-96, $15,550.70 Tax, $1,555.07 Penalty, Negligence

For Petitioner: No Appearance
For Sales and Use Tax Department: Jeffrey Graybill, Counsel

Action: The Board took no action.

John H. & Joan Marie Kramer, SR EH 23-726170-010; 89000407380

4-1-92 to 3-31-95, $16,042.40 Tax

For Petitioner: No Appearance
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

Action: The Board took no action.

Alan J. Berliner Studios, Inc., SR AS 18-693676-010; 89000238320

4-1-95 to 3-31-98, $8,746.98 Tax

For Petitioner: Michael J. Fitzpatrick, Attorney
Alan Berliner, President
For Sales and Use Tax Department: Jeffrey Graybill, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether petitioner is the consumer of film purchased ex-tax and used to produce prints that it sold to its customers.

Mr. Chiang and Mr. Parrish entered the Boardroom.

Action: Upon motion of Mr. Chiang, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

Image Design & Marketing, Inc., SR AB 12-739831-010; 89000055230

1-1-92 to 12-31-94, $30,206.68 Tax

For Petitioner: No Appearance
For Sales and Use Tax Department: Jeffrey Graybill, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether charges to a certain purchaser were for nontaxable preliminary art.

Whether the alleged lack of value of stock received in payment from a certain purchaser warrants an adjustment to the determination.

Action: Upon motion of Mr. Parrish, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel voting yes, Mr. Chiang not participating, the Board ordered that the petition be redetermined as recommended by the Appeals Section.

Edward Cordero & Albert Hasson, SR AC 13-852109-010; 89000090730

4-1-93 to 6-30-95, $2,758.77 Tax, $00.00 Penalty

For Petitioner: Albert Hasson
For Sales and Use Tax Department: Sharon Jarvis, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether Albert Hasson has shown that he was not a partner; or alternatively, if he was a partner, that he withdrew from the partnership and notified the Board of his withdrawal.

Action: Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by the Appeals Section. The Board directed staff to remove any negative comments that may have occurred concerning Mr. Hasson's credit report.

Lysander Yachting, Ltd., SB UT 82-676859-010; 89001159050

The Olen Companies, Inc., SB UT 82-656664-010; 89001141680

8-31-96 to 9-30-96, $333,250.00 Tax, $41,075.00 Penalty, Failure to File

For Petitioner: Kermit D. Marsh, Attorney
Igor M. Olenicoff, Witness
For Sales and Use Tax Department: Sharon Jarvis, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether Lysander purchased the vessel for use in California.

Whether Lysander is not subject to use tax on its purchase of the vessel pursuant to the storage and use exclusion provided by Revenue and Taxation Code Section 6009.1.

Whether the measure of use tax with respect to Lysander's California purchase and use of the vessel is overstated.

Whether relief should be granted from the failure to file penalty.

Action: Upon motion of Mr. Parrish, seconded by Mr. Klehs and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel voting yes, Mr. Chiang not participating, the Board ordered that the petition be submitted for decision.

Dealer Software, Inc., SR AC 13-765564-010; 89000074610

7-1-95 to 6-30-98, $20,710.91 Tax

For Petitioner: Philip A. Cramer, President
For Sales and Use Tax Department: Robert Tucker, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether petitioner qualifies for relief from liability under Revenue and Taxation Code Section 6596 based on its reliance on a prior "no change" audit.

Action: Upon motion of Mr. Andal, seconded by Mr. Chiang and duly carried, Mr. Andal, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Klehs voting no, the Board ordered that the petition be redetermined and the taxable measure be reduced.

The Board recessed at 10:35 a.m. and reconvened at 10:50 a.m. with Mr. Andal, Mr. Chiang and Ms. Mandel present.

Mukhtiar Singh Sagoo, SR AC 13-877110-010; 89000097400

4-1-92 to 9-30-95, $00.00 Tax, $00.00 Penalty

For Petitioner: Paul Sagoo, Manager
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether relief from the interest is warranted under Revenue and Taxation Code Section 6593.5

Action: Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Chiang and Ms. Mandel voting yes, Mr. Parrish and Mr. Klehs absent, the Board ordered that the petition be redetermined in accordance with the revised recommendation of the Appeals Section.

Mr. Parrish and Mr. Klehs entered the Boardroom.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be denied in regards to interest abatement.

Upon motion of Mr. Andal, seconded by Mr. Parrish and duly carried, Mr. Andal, Mr. Parrish and Mr. Chiang voting yes, Mr. Klehs voting no, Ms. Mandel not participating, the Board directed staff to assist Mr. Sagoo in filing a Board of Control Claim for interest abatement.

Gold Prospectors Association, Inc., SR EH 25-830344-010; 89000578640

7-1-93 to 6-30-96, $26,231.48 Tax, $00.00 Penalty, Negligence

For Petitioner: No Appearance
For Sales and Use Tax Department: Jeffrey Graybill, Counsel

Action: The Board took no action.

Heritage Home Brokers, Inc.; SR EA 24-802418-010; 89000463970

7-1-93 to 6-30-96, $34,320.08 Tax; $3,432.01 Penalty, Negligence

For Petitioner: Eva Corbett, Petitioner
Ronald E. Monard, Attorney
Gary M. Corbett, Participant
For Sales and Use Tax Department: Robert Tucker, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether the evidence establishes that certain mobilehome sales were transferred to property tax rolls, thereby making the transactions not subject to sales tax.

Whether the evidence establishes that the audit contains incorrect manufacturers, models, and sizes for certain mobilehomes.

Whether the evidence establishes that on certain transactions the audited sales price is greater than the actual sales price.

Whether the evidence establishes that the mobilehomes were in poor condition when sold and needed extensive repairs.

Whether relief from the penalty for negligence is warranted.

Whether petitioner received misinformation qualifying for relief from the tax.

Mr. Klehs left the Boardroom.

Action: Upon motion of Mr. Parrish, seconded by Mr. Chiang and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Klehs absent, the Board ordered that the petition be submitted for decision.

Michael Anthony Kadletz, SR AB 14-758612-010; 89000126190

10-1-92 to 9-30-95, $79,242.65 Tax; $7,924.26 Penalty, Negligence

For Petitioner: Michael A. Kadletz, Taxpayer
Gail Geiser-Sandoval, Attorney
For Sales and Use Tax Department: Sharon Jarvis, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether the measure of tax is overstated because installed parts or fabrication labor on buses which were delivered out-of-state were included in the audited measure of tax.

Whether the audit method of establishing the ratio of invoiced parts versus invoiced labor was inappropriate because each conversion was unique.

Whether the evidence shows that certain vehicles were actually transported outside California by petitioner or its authorized agents, with the purchaser taking delivery out of this state.

Whether a contract to sell a used bus and subsequent contract to perform a full or partial conversion constitutes a single integrated taxable sale of a converted bus.

Whether relief from the penalty for negligence is warranted.

Action: Upon motion of Mr. Chiang, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Klehs absent, the Board ordered that the petition be submitted for decision.

FINAL ACTION ON PETITIONS HEARD - NOVEMBER 29, 2000

The Board deferred consideration of Alan Berliner Studios, Inc., SR AS 18-693676-010; 89000238320 to later in the day.

Mr. Andal moved to delete the failure to file penalty and to redetermine the remainder of the petition of Lysander Yachting, Ltd., SB UT 82-676859-010; 89001159050; The Olen Companies, Inc., SB UT 82-656664-010; 89001141680, the motion failed for lack of a second.

Mr. Andal made a substitute motion to redetermine at a purchase price of $2.2 million, seconded by Mr. Parrish and duly carried, Mr. Andal and Mr. Parrish voting yes, Ms. Mandel voting no, Mr. Chiang not participating, Mr. Klehs absent.

Upon motion of Mr. Andal, seconded by Mr. Parrish and duly carried, Mr. Andal and Mr. Parrish voting yes, Ms. Mandel voting no, Mr. Chiang not participating, Mr. Klehs absent, the Board ordered that the failure to file penalty be deleted.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Chiang and Ms. Mandel voting yes, Mr. Parrish abstaining, Mr. Klehs absent, the Board ordered that the petition of Heritage Home Brokers, Inc.; SR EA 24-802418-010; 89000463970, be redetermined as recommended by the Appeals Section.

Mr. Parrish moved to delete the negligence penalty. The motion was seconded by Mr. Andal but failed to carry, Mr. Parrish voting yes, Mr. Andal, Mr. Chiang and Ms. Mandel voting no, Mr. Klehs absent.

Upon motion of Mr. Andal, seconded by Ms. Mandel and duly carried, Mr. Andal, Mr. Chiang and Ms. Mandel voting yes, Mr. Parrish voting no, Mr. Klehs absent, the Board ordered that the petition of Michael Anthony Kadletz, SR AB 14-758612-010; 89000126190, be redetermined as recommended by the Appeals Section.

Upon motion of Mr. Andal, seconded by Mr. Chiang, and unanimously carried, with Mr. Andal, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Klehs absent, the Board ordered the negligence penalty be deleted.

BUSINESS TAXES APPEALS HEARINGS

Target Plastics Company, Inc., SR EH 24-827493-010; 89000469090

7-1-95 to 6-30-98, $00.00 Tax, $5,102.97 Penalty, Negligence

For Petitioner: Kris Mirzayan, Owner
For Sales and Use Tax Department: Robert Tucker, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether relief from the negligence penalty is warranted.

Mr. Chiang left the Boardroom.

Action: Upon motion of Mr. Parrish, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish and Ms. Mandel voting yes, Mr. Klehs and Mr. Chiang absent, the Board ordered that the petition be submitted for decision.

Special Respiratory Care, Inc., SY AC 23-747190-010; 89000409870

7-1-95 to 6-30-98, $2,434.04 Tax

For Petitioner: Gilbert Valdesuso, President
Ken Johnson, Vice President
For Sales and Use Tax Department: Jeffrey Graybill, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether petitioner's after-hours transportation charges for deliveries made by petitioner's own facilities are excluded from tax.

Action: Upon motion of Ms. Mandel, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish and Ms. Mandel voting yes, Mr. Klehs and Mr. Chiang absent, the Board ordered that the petition be granted as to the disputed items.

The Board recessed at 12:20 p.m. and reconvened at 1:30 p.m. with Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel present.

BUSINESS TAXES APPEALS HEARINGS

Jack C. Scott, TK MT 44-038220-010; 89000950120

1-1-91 to 9-30-96, $4,164.78 Tax; $416.47 Penalty, Late Payment

For Petitioner: Darlene Stoddard, Bookkeeper
For Sales and Use Tax Department: Janet Vining, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether relief from the storage fees is warranted based on petitioner's allegation that he had no knowledge of the Underground Storage Tank Maintenance Fee Law and its application to his business operations.

Whether relief from the interest charges is warranted.

Mr. Chiang entered the Boardroom.

Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Mr. Chiang voting yes, Ms. Mandel not participating, the Board ordered that the penalty be deleted; otherwise redetermine as recommended by the Appeals Section. The Board ordered staff to assist petitioner with filing a Board of Control Claim. If the claim is denied, the Board directed staff to provide the petitioner with a generous payment plan.

BUSINESS TAXPAYERS' BILL OF RIGHTS HEARING

Mr. Andal stated this was the full Board meeting to hear what taxpayers believe can be done to improve functions of the Board of Equalization.

Jennifer Willis, Taxpayers' Rights Advocate, made introductory remarks.

Speakers: Peter W. Ballas, Accountant, Williams & Ballas

Edward E. Tawil, Reformist, (Exhibit 11.25)

Clarissa Siemens, El Jalapeno Market Y Carnicoria, (Exhibit 11.26)

Bernard McEwen, Taxpayer

Faylin Voeltz, Evidence submitted by Ms. Voeltz, (Exhibit 11.27)

Exhibits to these Minutes are incorporated by reference.

PROPERTY TAXPAYERS' BILL OF RIGHTS

Mr. Andal stated this was the full Board meeting to hear what taxpayers believe can be done to improve functions of the Board of Equalization.

Jennifer Willis, Taxpayers' Rights Advocate, made introductory remarks.

Speakers: Donald Mann, Taxpayer

Joseph Vinatieri, Bewley, Lassleben & Miller, LLP

BUSINESS TAXES APPEALS HEARINGS

Akbar Parandeh, SR AC 99-360178-010; 89002216790

10-1-93 to 9-30-96, $21,093.77 Tax, $2,210.67 Penalty, Negligence

For Petitioner: Akbar Parandeh, Owner
Vahab Aghai, Representative
For Sales and Use Tax Department: Richard Goodrich, Hearing Representative

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether audited taxable sales were established in accordance with the facts.

Whether relief from the negligence penalty is warranted.

Action: Upon motion of Mr. Chiang, seconded by Mr. Klehs and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

Mastroianni Family Enterprises, Ltd., SY EA 24-708685-030; 89000449840

1-1-94 to 12-31-96, $16,427.13 Tax

For Petitioner: Tami Bunnett
For Sales and Use Tax Department: Sharon Jarvis, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether claimed tax-paid purchases resold deductions and petitioner's tax sublease of the property at issue should be allowed because the property is not customarily provided in connection with the preparation and furnishing of food.

Alternatively, whether relief from the tax is warranted because petitioner received qualifying misinformation under Revenue and Taxation Code Section 6596.

Action: Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered to grant the petition as to the disputed items.

Harold D. Strain, SP UT 82-652501-010; 89001136480

December 1996, $2,790.00 Tax

For Petitioner: No Appearance
For Sales and Use Tax Department: Janice Thurston, Counsel

Action: The Board took no action.

Consolidated Cigar Corporation, CP ET 50-002241-010; 31686

5-10-91 to 12-30-93, $10,354.74 Tax, $00.00 Penalty

For Petitioner: Connie Falbo, Tax Manager
John Weller, Attorney
For Sales and Use Tax Department: Janet Vining, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether taxpayer made distributions in this state of tobacco products subject to tax under Revenue and Taxation Code Section 30123.

Action: Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

Dennis L. Clinkenbeard, FV EH 23-732569-010, -020; 8900408220, -240

1-1-92 to 12-31-94, $97,237.12 Tax

For Petitioner: Joseph A. Vinatieri, Attorney
Dennis L. Clinkenbeard, Petitioner
David Wanzek, Participant
For Sales and Use Tax Department: Janet Vining, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether credit for tax paid to one certain vendor should be allowed.

Whether petitioner received and relied on qualifying misinformation in the prior audit within the meaning of Revenue and Taxation Code Section 8879.

Action: Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

The Board recessed at 4:00 p.m. and reconvened at 4:10 p.m. with Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel present.

CTSI Corporation, SR EA 24-962929-010; 89000503890

7-1-93 to 6-30-95, $39,565.10 Tax

For Petitioner: No Appearance
For Sales and Use Tax Department: Warren Astleford, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether the administrative and warehousing fees are excludable from gross receipts.

Whether petitioner was purchasing ultra-low-flush toilets as an agent for the Metropolitan Water District of Southern California.

Action: Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Mr. Chiang voting yes, Ms. Mandel not participating, the Board ordered to grant the petition as to the disputed items.

New Wave Converting, Inc., SR EH 23-780057-010; 89000413600

10-1-94 to 9-30-97, $19,925.66 Tax

For Petitioner: No Appearance
For Sales and Use Tax Department: Warren Astleford, Counsel

Action: The Board took no action

Columbia Manufacturing Corporation, SR AB 11-601461-010, 89000010080

7-1-95 to 6-30-98, $9,185.85 Tax, $00.00 Penalty

For Petitioner: No Appearance
For Sales and Use Tax Department: Warren Astleford, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether petitioner's ex-tax purchases of certain advertising materials and marketing aids are subject to use tax.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel voting yes, Mr. Chiang not participating, the Board ordered that the petition be redetermined as recommended by the Appeals Section.

Hermilio Franco, SY AA 12-703478-010; 89000047390

4-1-94 to 3-31-97, $158,556.92 Tax, $00.00 Penalty

For Petitioner: Beatriz M. Lopez, Attorney
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether audited taxable sales computed on a mark-up basis were established in accordance with the facts.

Action: Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

John Lindsey Dorman, SR AP 99-202576-010; 89002145410

7-1-94 to 12-31-97, $14,545.22 Tax,

For Petitioner: No Appearance
For Sales and Use Tax Department: Jeffrey Graybill, Counsel

Action: The Board took no action.

Mr. Andal left the Boardroom.

Marcella L. Bade & Marcella Halprin, SR AS 99-531344-010; 89002295940

7-1-94 to 6-30-97, $48,828.06 Tax, $4,882.79 Penalty, Negligence

$4,882.81 Penalty, Failure to Pay Timely

For Petitioner: Alexander C. Anguiano, CPA
For Sales and Use Tax Department: Sharon Jarvis, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether petitioner has proven that the unreported sales were either nontaxable sales for resale or exempt sales in interstate commerce.

Whether relief from the negligence penalty is warranted.

Whether relief from the penalty for failure to timely pay the liability is warranted.

Action: Upon motion of Ms. Mandel, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition be submitted for decision.

Wageh Daoud Ishak, SR AP 99-207233-010; 89002147770

1-1-94 to 12-14-96, $26,561.76 Tax, $2,714.83 Penalty, Negligence

For Petitioner: No Appearance
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

Action: The Board took no action.

SARBCO, Inc., SY AS 13-836817-010; 89000087120

10-1-92 to 12-31-95, $196,328.14 Tax, $19,632.84 Penalty, Negligence

For Petitioner: Karen Goldberg, Representative
Mike Sarian, President
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether the audited retail sales should be established by applying a percentage to recorded nontaxable labor sales rather than on a markup basis.

Whether the audited markup is excessive.

Whether the audited costs of goods sold are excessive.

Whether relief from the penalty for negligence is warranted.

Mr. Andal entered the Boardroom.

Action: Mr. Parrish moved to reduce the negligence penalty. The motion was seconded by Mr. Chiang but failed to carry, Mr. Parrish and Mr. Chiang voting yes, Mr. Klehs and Ms. Mandel voting no, Mr. Andal not participating.

Upon motion of Ms. Mandel seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal not participating, the Board ordered that the petition be submitted for decision.

PETITION FOR RELEASE OF SEIZED PROPERTY

Thuy Thanh Nguyen, SR EA 99-831486, 88764

8-11-2000

For Petitioner: James T. Stroud, Attorney
For Sales and Use Tax Department: Janet Vining, Counsel
Monte Williams, Chief, Investigations Div.

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether the Board staff properly seized the 5591 cartons of cigarettes.

Action: Upon motion of Mr. Chiang, seconded by Mr. Klehs and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

BUSINESS TAXES APPEALS HEARINGS

J.S.I. Cortez Pallets, Inc., SR EH 99-104199-010, -020; 89002104510, -520

10-1-93 to 9-30-96, $13,373.56

For Petitioner: Waived Appearance
For Sales and Use Tax Department: Sharon Jarvis, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether only about 15 to 20 percent of the total repair charges are attributable to the cost of material used in reconditioning pallets.

Alternatively, whether petitioner is entitled to relief from the tax under Revenue and Taxation Code Section 6596.

Action: Upon motion of Mr. Chiang, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition be redetermined in accordance with the revised recommendation of the Appeals Section.

Cecil Tse-Hsing Hsu, SR AC 99-278927-010; 89002180500

5-15-93 to 3-31-97, $166,699.38 Tax, $41,674.86 Penalty, Fraud

For Petitioner: No Appearance
For Sales and Use Tax Department: Sharon Jarvis, Counsel

Action: The Board took no action.

Mr. Klehs stated for the record, that he would have voted as follows: In the petition of Lysander Yatching, Ltd., SB UT 82-676859-010, 89001159050, not participating, Michael Kadletz, SR AB 14-758612-01, 89000126190, voting yes to delete the negligence penalty and otherwise redetermine as recommended by the Appeals Section, and Special Respiratory Care Inc., SR AC 23-747190-010, 89000409870, voting yes to the revised recommendation of the Appeals Section.

Mr. Chiang stated for the record, that he would vote yes on the revised recommendation of the Appeals Section in the matter of Special Respiratory Care Inc., SR AC 23-747190-010, 89000409870.

FINAL ACTION ON PETITIONS HEARD - NOVEMBER 29, 2000

Mr. Klehs moved to redetermine the petition of Alan J. Berliner Studios, Inc., SR AS 18-693676-010; 89000238320. Mr. Andal made a substitute motion to reduce the taxable measure by 50%; otherwise redetermine as recommended by the Appeals Section. The motion was seconded by Mr. Chiang and unanimously carried with Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes.

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel voting yes, Mr. Chiang not participating, the Board ordered that the petition of Target Plastics Company, Inc., SR EH 24-827493-010; 89000469090, be redetermined as recommended by the Appeals Section.

Upon motion of Mr. Klehs, seconded by Ms. Mandel and duly carried, Mr. Andal, Mr. Klehs and Ms. Mandel voting yes, Mr. Chiang voting no, Mr. Parrish abstaining, the Board ordered that the petition of Akbar Parandeh, SR AC 99-360178-010; 89002216790, be redetermined as recommended by the Appeals Section.

Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition of Consolidated Cigar Corporation, CP ET 50-002241-010; 31686, be redetermined as recommended by the Appeals Section.

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that the petition of Dennis L. Clinkenbeard, FV EH 23-732569-010, -020; 8900408220, -240, be granted as to the disputed items, pursuant to section 8879 (Exhibit 11.28).

Upon motion of Mr. Klehs, seconded by Ms. Mandel and unanimously carried, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Parrish abstaining, Mr. Andal not participating, the Board ordered that the petition of Marcella L. Bade & Marcella Halprin dba Architectural Lighting and Design, SR AS 99-531344-010; 89002295940, be redetermined as recommended by the Appeals Section.

Action: (Expunged)

Action: (Expunged)

Mr. Andal motioned to expunge the previous motions to remove the penalty and to redetermine the petition of SARBCO, Inc., SY AS 13-836817-010; 89000087120.

Upon motion of Mr. Parrish, seconded by Mr. Chiang and duly carried, Mr. Andal, Mr. Parrish and Mr. Chiang voting yes, Mr. Klehs voting no, Ms. Mandel abstaining, the Board ordered the penalty be deleted.

Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Klehs, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal not participating, the Board ordered that the remainder of the petition be redetermined as recommended by the Appeals Section.

Mr. Parrish moved to delete the penalty in the petition of Hermilio Franco dba El Faralion Night Club, SY AA 12-703478-010; 89000047390. The motion was seconded by Mr. Andal but failed to carry, Mr. Andal and Mr. Parrish voting yes, Mr. Klehs, Mr. Chiang and Ms. Mandel voting no.

Upon motion of Mr. Klehs, seconded by Mr. Chiang and duly carried, Mr. Andal, Mr. Parrish, Mr. Klehs and Ms. Mandel voting yes, Mr. Chiang voting no, the Board ordered that the petition be redetermined as recommended by the Appeals Section.

PETITION FOR RELEASE OF SEIZED PROPERTY - NOVEMBER 29, 2000

Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Andal, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, the Board ordered that in the petition of Thuy Thanh Nguyen, SR EA 99-831486, 88764, the seizure of cigarettes be upheld.

The Board adjourned at 5:55 p.m.

The foregoing minutes are adopted by the Board on March 28, 2001.