Approved Minutes Wednesday, February 2, 2000

The Board met at its offices at 5901 Green Valley Circle, Culver City, at 9:00 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

Vector Resources, Inc., SS AS 18-728811-010, 89000245270

7-1-93 to 6-30-96, $6,433.45

For Petitioner: No Appearance

For Sales and Use Tax Department: Sharon Jarvis, Counsel

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

Issue: Whether petitioner is entitled to relief from the tax based on petitioner’s assertion that certain ex-tax materials installed pursuant to construction contracts actually qualify as nontaxable sales for resale.

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

Mr. Chiang entered the Board room.

Diamond W. Supply Co., SY AA 14-029701-010, 89000102370

7-1-92 to 6-30-95, $64,247.10

For Petitioner: Mary L. O’Brien

Louise Bahar, CFO

Daniel Erickson, Controller

For Sales and Use Tax Department: Jeffrey Graybill, Counsel

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

Issue: Whether petitioner received and relied on written advice from the Board within the meaning of Revenue and Taxation Code section 6596.

Mr. Parrish entered the Boardroom.

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.

WEI West, SR OHA 17-810337-010, 89000222880

1-1-93 to 12-31-95, $145,803.47

For Petitioner: Jeffrey S. Baird, Attorney

Tony Caruso, Controller

For Sales and Use Tax Department: Sharon Jarvis, Counsel

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

Issue: Whether the evidence shows that petitioner did not furnish and install materials and fixtures pursuant to a U.S. Government construction contract.

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 that the petition be submitted for decision.

Juan Manuel and Trinidad Alday, SY AA 14-720900-010, 89000119320

4-1-91 to 12-31-94, $188,308.33

For Petitioner: Juan Manuel Alday

Trinidad Alday

For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

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

Issue: Whether the evidence provided is sufficient to support further adjustment to the overstatement of claimed sales for resale.

Whether the evidence provided is sufficient to support further adjustment to the ex-tax purchases of material used for lump sum contracts.

Whether petitioner has shown that the excess tax reimbursement billed on lump sum construction contracts in 1991 was not collected.

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 in accordance with the revised recommendation of the Appeals Section with regard to two of the 16 samples.

The Board deferred consideration of the remainder of this petition until later today so that the petitioner could present its exhibits to the Sales and Use Tax Department staff for review.

Michael Glick, SX AS 18-750102-010, 89000252150

10-1-93 to 9-30-96, $10,791.07

For Petitioner: Curtis M. Shields

For Sales and Use Tax Department: David Levine, Acting Assistant Chief Counsel

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

Issue: Whether the sales of "prop" food to the motion picture industry are taxable sales of tangible personal property or whether petitioner is performing a service and the sale of "prop" food is incidental to the services rendered.

Action: 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 abstaining, the Board ordered that the petition be redetermined with adjustments.

Tswan Inc., SR AP 17-791991-010, 89000217730

10-1-91 to 3-31-95, $23,461.54

For Petitioner: Grant Chien, CPA

Joe Lieou, President

Hsuzh Wong

For Sales and Use Tax Department: Mark Woolston, Hearing Representative

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

Issue: Whether admission charges should be less than 100% taxable.

Whether an allowance for "happy hour" sales is warranted.

Whether relief from the negligence penalty is warranted.

Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and duly carried,

Mr. Andal, Mr. Parrish and Mr. Chiang voting yes, Mr. Klehs and Ms. Mandel voting no, the Board ordered that the petition be redetermined with adjustments and deleted the negligence penalty.

Couple Up, Inc., SR AA 14-738976-010, 89000122330

1-1-95 to 10-20-95, $23,029.43

For Petitioner: No Appearance

For Sales and Use Tax Department: Warren Astleford, Counsel

Action: The Board took no action.

Snobird, Inc. FW OH 16-700526-010, 89000189300

1-1-93 to 12-31-94, $309,965.94

For Petitioner: No Appearance

For Sales and Use Tax Department: Judy Nelson, Counsel

Action: The Board took no action.

Felicitas Chavez Gonzalez, SR AP 17-738741-010, 89000207680

1-1-94 to 6-30-96, $5,916.85

For Petitioner: No Appearance

For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

Action: The Board took no action.

The Board recessed at 10:15 a.m., and reconvened at 10:25 a.m., with

Mr. Andal, Mr. Chiang and Ms. Mandel present.

ACTION ON PETITION HEARD FEBRUARY 2, 2000

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Andal, Mr. Chiang and Ms. Mandel voting yes, Mr. Klehs and Mr. Parrish absent, the Board ordered that the remainder of the petition of Juan Manual and Trinidad Alday, SY AA 14-720900-010, Case ID 89000119320, be redetermined with further adjustments.

Mr. Klehs and Mr. Parrish entered the Boardroom.

BUSINESS TAXES HEARINGS

PC Club, Inc., SY AP 17-813231-010, 89000223780

10-1-92 to 6-30-96, $37,665.63

For Petitioner: Clyde W. Sleigh II, Consultant

For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

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

Issue: Whether certain resale certificates accepted by petitioner are valid.

Whether certain resale certificates were accepted by petitioner in good faith.

Whether projecting the error rate using total sales overstates the disallowed claimed nontaxable/exempt sales.

Action: Upon motion of Mr. Parrish, seconded by Mr. Chiang 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.

Seaworld Seafood, SR AP 17-815573-010, 89000224320

1-1-94 to 3-31-97, $77,988.61

For Petitioner: No Appearance

For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

Action: The Board took no action.

Faramarz Yadegar and Bijan Yadegar, SR AS 18-745408-010; 89000250420; SR AB 99-108447-010; 89002106610; SR AS 99-108473-010; 89002106630; SR AS 99-216517-010; 89002152260; SR AS 99-255925-010; 89002169730; SR AC 99-305082-010; 89002191840; SR AB 99-395993-010; 89002233030; SR AS 99-591814-010; 89002320510; SR AC 99-632228-010; 89002336280; SR AS 99-650705-010; 89002344400; SR AA 99-699677-010; 89002364060

7-1-93 to 6-30-96, $123,028.77

For Petitioner: Steven D. Blanc, Attorney

Faramarz Yadegar

Bijan Yadegar

For Sales and Use Tax Department: Kevin Hanks, Hearing Representative

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

Issue: Whether the understatement of taxable sales was established in accordance with the facts.

Whether the use of a one-day observation test is an improper procedure to use to establish taxable sales.

Action: Upon motion of Mr. Parrish, 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 petitions be redetermined with adjustments.

Gripit Plus, Inc., SS OH 19-790254-010, 89000252150

4-1-92 to 6-30-96, $933.15

For Petitioner: Appearance Waived

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 trade show activities in this state, or its registration as a retailer, is sufficient to require petitioner to collect the use tax on its mail order sales to customers in this state.

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.

FINAL ACTION ON PETITIONS HEARD FEBRUARY 2, 2000

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 Diamond W. Supply Co., SY AA 14-029701-010, 89000102370, 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 WEI West, SR OHA 17-810337-010, 89000222880, be redetermined as recommended by the Appeals Section.

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 that the petition of PC Club, SY AP 17-813231-010, 89000223780, be redetermined as recommended by the Appeals Section.

The Board recessed at 11:10 a.m. and reconvened at 1:30 p.m. with

Mr. Andal, Mr. Klehs, and Ms. Mandel present.

BUSINESS TAX HEARINGS

Mohammad H. & Rebecca L. Vahedi, SR EH 23-829557-010, 89000421980

10-1-93 to 12-31-96, $1,654.24

For Petitioner: Mohammad Vahedi, Owner/Operator

For Sales and Use Tax Department: Mark Woolston, Hearing Representative

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

Issue: Whether disallowed claimed labor was established in accordance with the facts.

Whether evidence furnished proves that the additional vehicle sales were not made.

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

Mr. Chiang entered the Boardroom.

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

Price Pfister, Inc., SR AC 13-771444-010, 89000075580

10-1-90 to 9-30-93, $49,610.27

For Petitioner: No Appearance

For Sales and Use Tax Department: Warren Astleford, Counsel

Action: The Board took no action.

Marriott Corporation, SY OHB 30-628394-010, 89000817120

9-7-85 to 12-30-88, $514,914.61

For Petitioner: No Appearance

For Sales and Use Tax Department: Janice Thurston, Counsel

Action: The Board took no action.

Angela DeLorenzo, SR AA 99-565150-010, 89002310710

1-1-93 to 6-30-96, $27,698.07

For Petitioner: Jesus J. Mejia, CPA

Angela Delorenzo

For Sales and Use Tax Department: Mark Woolston, Hearing Representative

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

Issue: Whether the additional taxable sales were established in accordance with the facts.

Whether relief from the fraud penalty is warranted.

Mr. Parrish entered the Boardroom.

Action: Upon motion of Mr. Parrish, seconded by Mr. Andal and duly carried,

Mr. Andal, Mr. Parrish and Mr. Chiang voting yes, and Mr. Klehs and Ms. Mandel voting no, the Board ordered that the fraud penalty be reduced to a negligence penalty and redetermined the remainder as recommended by the Appeals Section.

Mr. Klehs left the Boardroom.

Donald Philip Johnson, SR EH 97-153338-010, 89002066730

1-01-94 to 6-30-97, $1,669.90

For Petitioner: Donald Philip Johnson

For Sales and Use Tax Department: Warren Astleford, Counsel

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

Issue: Whether petitioner is liable for paying sales tax on the sale of the vehicle in question.

Mr. Klehs entered the Boardroom.

Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and duly carried,

Mr. Andal, Mr. Parrish and Mr. Klehs voting yes, Mr. Chiang and Ms. Mandel voting no, the Board ordered that the petition be granted.

FINAL ACTION ON PETITION HEARD FEBRUARY 2, 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 the petition of Mohammad and Rebecca Vahedi, SR EH 23-829557-010, 89000421980, be redetermined as recommended by the Appeals Section.

The Board adjourned at 2:10 p.m.

The foregoing minutes are adopted by the Board on March 16, 2000