1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 5901 GREEN VALLEY CIRCLE 3 CULVER CITY, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 JUNE 18, 2010 10 11 SALES AND USE TAX APPEAL HEARING 12 APPEAL OF 13 JASON R. PRIDMORE 14 NO. 421508 (UT) 15 AGAINST PROPOSED ASSESSMENT OF 16 SALES AND USE TAX 17 18 19 20 21 22 23 24 25 Reported by: Juli Price Jackson 26 CSR No. 5214 27 28 1 1 2 P R E S E N T 3 For the Board Betty Yee of Equalization: Chair 4 Jerome E. Horton 5 Vice-Chair 6 Barbara Alby Acting Member 7 Michelle Steel 8 Member 9 Marcy Jo Mandel Appearing for John 10 Chiang, State Controller (per Government Code 11 Section 7.9) 12 Diane G. Olson, 13 Chief Board Proceedings 14 Division 15 For Board of David Levine 16 Equalization Staff: Staff Counsel 17 18 For Department: Andrew Kwee 19 Tax Counsel 20 Kevin Hanks Chief, Headquarters 21 Operations Division 22 Robert Tucker Tax Counsel IV 23 24 For Petitioner: Alessandro Assanti 25 Attorney 26 Jason R. Pridmore Taxpayer 27 28 ---oOo--- 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 JUNE 18, 2010 4 ---oOo--- 5 MS. YEE: Our next case? 6 MS. OLSON: Our next item is C16, Jason R. 7 Pridmore. 8 Please come forward. 9 MS. YEE: Mr. Levine? 10 MR. LEVINE: The issue in this petition is 11 whether the subject recreational vehicle was purchased 12 for use in California. 13 MS. YEE: Thank you very much. Good morning. 14 MR. ASSANTI: Good morning, Members of the 15 Board. My name is Alessandro Assanti and I'm counsel 16 for Jason Pridmore, who is sitting to my right. 17 MS. YEE: Okay. Very well, you have ten 18 minutes for your presentation. 19 MR. ASSANTI: Thank you, I don't believe it 20 will take that long. 21 But this is a matter that's involving the 22 purchase of a motor home. Pursuant to the moving papers 23 that we have received, I believe there was an increase 24 in the value of the purchase price, which we don't have 25 any contention with. They were claiming that there was 26 another 700 or $7,000 in the value of the initial 27 purchase of the vehicle, which ended in an increase of 28 tax of $579. 3 1 The primary purpose and why we're here today is 2 because we believe that Mr. Pridmore did not use this 3 vehicle, did not buy the vehicle with the intention of 4 using it in California. I know that -- that the -- they 5 brought the motion based on the regulation that if it is 6 purchased outside of California, but then brought back 7 in, then they're saying that Mr. Pridmore, because he is 8 a resident of California and has a business in 9 California and is domiciled here that he should be 10 responsible for paying the tax. 11 There are ways of rebutting that. One of the 12 ways is -- that we looked at is that primarily the 13 vehicle was used outside of California. The only reason 14 why it ever came back into the State of California was 15 because it had warranty work. 16 If I can get to -- excuse me for a minute. 17 First off, the case of Western Contracting 18 Court versus State Board of Equalization, it's 1968 265 19 Cal. App. 2d. at 568, states that, 20 "To establish the change in intent the 21 following two factors must be present: At the 22 time of purchase the taxpayer must not 23 contemplate bringing the property to California 24 for use in the state; and 2, the subsequent 25 change of intent must be beyond control of the 26 taxpayer." 27 First off, the prong -- the first prong, 28 Mr. Pridmore did not contemplate ever bringing the 4 1 vehicle back into the state within the subject test of 2 the year. 3 Secondly is when it was brought back, I found 4 out -- and Mr. Pridmore will tell you -- that he 5 purchased it for use of traveling to the races. He was 6 a professional motorcycle rider back when was this was 7 purchased, but also owned a school. And we submitted a 8 calendar of that school back in 2005. 9 And this is something that we -- we didn't even 10 come upon until recently, until I went over the code 11 with Mr. Pridmore and he says, "Well, when I did 12 purchase the vehicle back in early May of 2000," I am 13 sorry, early March of 2005, he drove it to Daytona. He 14 raced there. And then the next race, that following 15 season, was in Alabama Barber Motorsports Park, and 16 that's near Birmingham, Alabama. 17 Those two races, the first one occurred in -- 18 between March 9th to the 12th in Daytona Beach, Florida, 19 the other one occurred on April 22nd to the 24th in 20 Barber Motorsports Park. 21 As we had previously submitted, Mr. Pridmore 22 was injured during that time and he was hospitalized. 23 And he told me just today that he was unconscious at the 24 time that vehicle was even brought back for servicing go 25 because they were planning on taking it up north to the 26 Chicago area. But one of the team members brought the 27 vehicle back because they thought that they needed to 28 return it to Mr. Pridmore's home because the next race 5 1 was going to be in California. But that was not 2 Mr. Pridmore's intent at all. 3 Mr. Pridmore lived -- and that's what we 4 stated, he lived in California. And all of the races, 5 which are not many throughout the year, there's only the 6 April 29th race, the May 13th race, which is -- the 7 first one is in California Speedway, which is in 8 Fontana, the second one is May 13th to 15th, which was 9 Infineon Raceway, which is in Sonoma, California. Those 10 two races out of the entire schedule, besides the Laguna 11 Seca race, were the only ones that ever happened in 12 California. 13 Mr. Pridmore lives close enough that he could 14 travel. He knew friends up in the -- up in the Northern 15 California area, so, he would stay there. And this is 16 generally what he did during his entire career. 17 So, we have only 29 days of service, most of 18 those -- when it got back here, Mr. Pridmore was 19 unconscious and in surgery. He said, okay, get it 20 fixed. So, it was fixed and it was -- it was thereafter 21 taken to the Chicago area. 22 So, that vehicle went to Road America, which 23 was in Elkhart Lake, Indiana. And if you see -- look at 24 the schedule, from there, it never came back. It just 25 remained outside of the state. 26 So, he only had the days for service that is 27 there and the rest of the time during the entire test 28 year it's in other parts of the country. 6 1 And if you look at his schedule, and this is 2 what we submitted -- and I apologize for not submitting 3 this earlier -- but this schedule starting on June 13th, 4 which is the second entry on the day, and if you go all 5 of the way down, it goes from Joliet, Illinois and has 6 two schools there. And the reason why he was having the 7 schools in that part of the country is because that's 8 where his race team was based that year and that's where 9 Michael Jordan based the race team. 10 And from there he traveled the rest of the 11 circuit, which was on the east coast. It never came 12 back into the state until the following year, which was 13 in March or -- I am sorry, yes, March of the following 14 year. 15 What I have problems with is the papers that we 16 were -- that were submitted, they say, okay, if you look 17 at the Interstate Commerce clause -- and they say, 18 "Well, that's one the exemptions." We've already 19 satisfied the other two exemptions on the case that I 20 just read you, but the other exemption is whether this 21 vehicle was used in interstate commerce. And it was, 22 entirely. 23 Mr. Pridmore, he raced professionally in the 24 American Motorcyclists Association races. They're 25 televised races and he had a long career. But during 26 the 2005 year, this is the test period, that vehicle 27 came to the state just once, was serviced and left. It 28 never came back again because he used it to -- so he 7 1 could live at the race track during all these races. 2 And also he would drive this vehicle to all of the 3 schools that he taught throughout the country. 4 And if you look at beginning when the vehicle 5 went back to Elkhart Lake, Wisconsin, it is -- there is 6 never even a school up until September 12th and 13th -- 7 I am sorry, up until September 26th of that year, which 8 is in Willow Springs, Rosamond, California. 9 But that -- the vehicle remained back, as you 10 see there is declarations from some of his -- the team 11 manager, which is where the race was, Mukwonago, 12 Wisconsin, correct? That's where the bus remained, 13 other than Mr. Hays' residence. 14 But this is all interstate commerce. And what 15 the Interstate Commerce clause says is trade that takes 16 place across state lines. And that's what all this was. 17 He's a professional racer. He made income from his race 18 team and from other sponsors. He traveled throughout 19 the United States. This Motor -- Star Motorcycle 20 School, which Mr. Pridmore is a chief instructor, was 21 conducting business all over the United States. 22 And they claim that you have to have 50 percent 23 of the miles the next time the bus is able to be 24 assessed and this is what the -- this is what the State 25 Board of Equalization claims, okay, there is 18,000 26 miles on this vehicle the next time it's looked at, but 27 they claim that there is only, I believe, it was 3,000 28 of those miles, which is less than 50, I don't 8 1 understand how they got to that figure when the vehicle 2 is entirely out of the state doing business, whether 3 it's for Star Motorcycle School or as his profession -- 4 as a professional road race rider. 5 He satisfied the presumption or he's rebutted 6 the presumption completely. I don't understand why 7 there's even a question that he should be -- that this 8 vehicle was used in interstate commerce. 9 So, that's -- that's my presentation and thank 10 you for listening to me. 11 MS. YEE: Okay, thank you, Mr. Assanti. 12 Mr. Pridmore, do you have anything to add? 13 MR. PRIDMORE: You know, the biggest thing that 14 I have learned from this whole situation is to keep 15 better records of certain things because throughout my 16 career there were times when other people were driving 17 my motor home for me, taking it to places that I needed 18 to fly to because of my schedule. 19 I am gone 30 some weeks of the year. I'm 20 constantly traveling, whether it be worldwide or here in 21 the States. 22 The motor home was a means for me to be able to 23 stay at the track once I got there. It was nicer than 24 staying in hotels and all the other stuff that you have 25 to do, you know, when you have this job for a living. 26 After my accident in Alabama in 2005, I had -- 27 I had a pretty bad accident there. And one of the team 28 members took it upon themselves, since the next event 9 1 was in Fontana, the semi-trailers that the team owns 2 were driving to Fontana, well, they decided -- one of 3 the team members decided, well, we'll do him a favor and 4 take his motor home for him. For two days I was in 5 intensive care. I didn't know my motor home was 6 actually going home until two days after it had already 7 left. So, they were probably, you know, in New Mexico 8 or something by the time I found out that my motor home 9 was going home. 10 There was some warranty work that needed to be 11 done to it and some things that were going to get added 12 to the motor home. But I wasn't -- I was just figuring 13 I would get that done somewhere along the line. 14 But once it got back to California, you know, 15 the dealer that I bought it from is right next to the 16 racetrack in Fontana. So, the race was at Fontana. 17 They took it there the following Monday, the day after 18 the event that I didn't even go to, I never even was 19 there, and then I missed the next three events. So, 20 they sent a team member from the team back to California 21 to pick my motor home up, drove it to Wisconsin, because 22 that was the first event that it looked like I was going 23 to be able to make it back for, which I did. 24 But after that, you know, after the end of the 25 season, I would routinely leave my motor home at my 26 friend's house down in Mississippi because the last race 27 of the season was in Atlanta, Georgia and then the first 28 race of the season was always in Daytona Beach. So, 10 1 there was no sense in me driving my motor home all the 2 way back across country to drive it all the way back 3 across country. 4 Then in 2006, after Daytona and after Alabama 5 again, then I finally drove it back. That was, I 6 believe, in April of 2006. 7 But the one thing that we failed to do, and 8 believe it or not, this little piece of paper I have in 9 front of me was very hard to find. This was our 10 schedule for 2005. We -- we thought we got rid of all 11 these brochures. We actually found one. And if you 12 look on here it shows, you know, that I'm always -- I do 13 hardly any business in California, especially during 14 this time. And my motor home was always going to all my 15 motorcycle schools with me too. If it wasn't at a race, 16 it was usually at the schools with me. I just found it 17 a better -- better way to live, like I said, than out of 18 hotels and rental cars and things like that. 19 So -- but like I said previously, to start 20 with, the thing I have learned probably the most from 21 this is just, you know, when people were driving my 22 motor home or whatever they were doing, keeping better 23 records of where it actually was, that was probably the 24 biggest thing, where it was. 25 MS. YEE: Okay, thank you, Mr. Pridmore. We'll 26 give you both time on rebuttal. 27 Department, please? 28 MR. KWEE: Good morning, Madam Chairwoman and 11 1 Members of the Board. 2 I'm Andrew Kwee on behalf of the Board's Legal 3 Department. With me today is Kevin Hanks, to my right, 4 from the Sales and Use Tax Department and to his right 5 is Bob Tucker. Bob's also from the Legal Department. 6 Our position is that we concur with the Appeals 7 Division's recommendation. The Petitioner disputes the 8 determination that he purchased his recreational vehicle 9 for use in California and is, therefore, liable for the 10 use tax under Regulation 1620 for purchases of vehicles 11 during the time period at issue. Use tax applies if the 12 vehicle is first brought into California within 12 13 months after the date of its purchase and either the 14 purchaser is a California resident, the vehicle was 15 subject to registration with the DMV during that time 16 period or the vehicle is used or stored in the state 17 more than half the time period of the first 12 months of 18 ownership. 19 It is not relevant for these purposes that the 20 vehicle is primarily in the state if we have established 21 that the Petitioner is a California resident or is 22 subject to registration in California just to clarify 23 the test. 24 The presumption, however, may be rebutted by 25 evidence that the vehicle was purchased for use outside 26 the state, such as evidence of out-of-state 27 registration. In this case, the Petitioner purchased 28 his motor home in Arizona in March of 2005 and has not 12 1 disputed that the Petitioner is a California resident, 2 that the vehicle was registered with the California DMV 3 at the time of the purchase and that the Petitioner 4 obtained insurance for the vehicle, reporting his 5 California address as the registered address for the 6 vehicle. 7 It is also undisputed that the vehicle entered 8 California no later than May 2nd, 2005, two months after 9 the date of purchase. 10 Therefore, for these reasons, the vehicle is 11 presumed to be purchased for use in the state. We -- 12 regarding the change of intent, the Petitioner appears 13 to be claiming that it was not purchased for use in 14 California because he purchased his motor home for use 15 outside California while traveling to out-of-state 16 events for the 2005 AMA Super Bike Championship events 17 and the annual event consisted of ten races throughout 18 the United States, three of which were in California. 19 And the Petitioner appears to have said that 20 the motor home -- if my understanding is correct, he 21 said that the motor home was brought back to the Laguna 22 event but that was by accident because the teammates had 23 thought that he was going to be racing. He didn't know 24 about that, but, I mean, that would show that he 25 intended to use the vehicle at the Laguna event because 26 it was brought back to California for the purpose of 27 being used in the Laguna California racing event. It 28 seems that was his original intent. 13 1 Regarding the warranty and the repair rebuttal, 2 from September 6th, 2006 until June 30th, 2007 the 3 presumption that the vehicle was purchased for use in 4 the State may be rebutted by documentary evidence that 5 the vehicle was brought into the State for the exclusive 6 purposes of warranty or repair service and was used or 7 stored in this State for that purpose for 30 days or 8 less. 9 But this provision is not applicable because 10 Petitioner's vehicle repairs and upgrades at issue were 11 completed in the 12 month test period ended prior to 12 September 20th, 2006. 13 Regarding the interstate commerce rebuttal, the 14 use tax will also not apply if one-half or more of the 15 miles traveled by the vehicle during the six-month 16 period immediately following its first entry into 17 California on May 2nd, 2005 are commercial miles 18 traveled in interstate commerce. Again this -- 19 regarding this exhibit that was attached, as Petitioner 20 indicated, this is actually the first time that we have 21 had evidence -- that he had stated that it was used for 22 use in his motorcycle business. 23 Again, his prior testimony is -- not prior 24 testimony, his prior position was that the vehicle had 25 never entered California. His original position was 26 that the vehicle had never entered California and was 27 purchased for use by the AMA Super Bike Racing Event and 28 then we had the vehicle service records showing that it 14 1 did enter California in May 2nd of 2006. 2 But even after that, all the documentation that 3 has been provided by the Petitioner has indicated that 4 the vehicle and the motor home weren't always at the 5 same place at the same time. 6 For example, if you look at the exhibits that 7 are attached, it shows that during these first three 8 events, June 14th, June 20th and 21st and -- well, it 9 showed that the manager for his motor sports team stated 10 that the vehicle was stored in Wisconsin from June 6 to 11 July 17th. So, that's not -- that shows -- that's 12 suggesting that it's not used in the motorcycle schools 13 schedule again. 14 So, basically, the bottom line is -- also then 15 the Petitioner had indicated that he didn't participate 16 in the California races, but if you look at the -- 17 online at the race results, we did that and we found out 18 that he actually did race in the July California event 19 in the Mazda Laguna -- or the Mazda raceway. 20 So, basically, we found some inconsistencies 21 and that why we just want the reliable documentation 22 that the Petitioner and the motor home were in the 23 same place at the same time and then also that that 24 motor was being used for commercial miles in interstate 25 commerce. And, basically, we didn't find the 26 documentation sufficient to show that the vehicle was 27 being used for these purposes. And that's what we were 28 just asking for sufficient documentation regarding that 15 1 use. 2 MS. YEE: Okay, thank you, Mr. Kwee. 3 Gentlemen, you have five minutes on rebuttal. 4 MR. ASSANTI: Yes, thank you. 5 First off, the vehicle was not used for any 6 recreational purpose whatsoever. It was used primarily 7 for -- well, solely for his schools and solely for his 8 racing career. That's where he used it and he's just 9 testified that that's -- he thought it was a better way 10 to live by being at the track and living there instead 11 of hotels and rental cars. 12 It appears that counsel is getting confused 13 about the venues. Mr. Pridmore never claimed that he 14 didn't race in California. But what I think is 15 happening, is he -- is April 29th through May 1st, that 16 California venue is in Fontana. He did not race there 17 and we have contended and we have supplied documents 18 that he did not race. There was no results. We have 19 also supplied evidence to show that he had an interview 20 with a magazine and that he was injured. He had a 21 ruptured spleen and he could not race. 22 He missed also the May 13th through 15th event, 23 which was also in California, that's Northern 24 California. Never did he go to that race. 25 The vehicle was only in the -- in the state for 26 the purpose of repair and warranty, period. He didn't 27 use it ever here. He didn't have any reason to use it. 28 And just because a teammate brings it back 16 1 because he's unconscious doesn't mean that he had intent 2 to use it here. In fact, it states the very -- the 3 opposite. He did not intend to use it here because it 4 would have been, one, cumbersome. He can live easily in 5 someone's house and go to the race track instead of 6 having to worry about the fact of bringing it all of the 7 way back to California when he's going to log another 8 2,000 miles when most of the races are back -- we have 9 shown that they're back on the east coast. 10 He did race at Road America, that's the first 11 race that he raced at and that's June 3rd, 2005 and that 12 is in Wisconsin. That's when the motor home went back 13 and that's what the records say. We've never contended 14 anything different. It was here solely for warranty 15 work and it went back east. It remained back there. 16 And just because someone says that they store 17 it doesn't mean that it stayed there not being used. I 18 mean, why would you store a vehicle you paid several 19 hundred thousand dollars for but yet we've shown them 20 clearly that there was a race at Road America and then 21 all of the way -- they're going to bring it all of the 22 way back to California again for Mazda raceway when it's 23 just so much easier for him to travel back by plane, 24 stay at his friend's house that lives in Salinas and 25 it's less than five minutes away. And that's what 26 happened. 27 MR. PRIDMORE: And also, just to back, I can 28 see also some confusion in the sense that my motor home 17 1 was driven back to Wisconsin. And I actually didn't use 2 my motor home for the school at Second Creek, Colorado 3 because I was still convalescing at that point. And I 4 missed that race in Pike's Peak. So, I didn't -- I 5 didn't have my motor home in Colorado. 6 The next race after Infineon and after Pike's 7 Peak, rather, was in Road America, Wisconsin, which is 8 the first race I was supposed to get back to. That's 9 where the team lives. So, they sent somebody out here 10 to drive it back home for me. So, I didn't use it at 11 the Second Creek schools. 12 Like we did just get that to them this morning 13 and I could have explained that. But the actual first 14 race that I actually came back to was Laguna Seca, which 15 is where they said that they saw the results for. That 16 was actually my first round back because I tried to ride 17 after Road America Wisconsin, I tried to ride there but 18 I couldn't. And, so, my first event back was Laguna 19 Seca. 20 But like Alex says here, there is not much 21 sense in me driving my motor home from Wisconsin all the 22 way back to California to then drive it all of the way 23 back east again for one event. It just didn't make any 24 sense for me. 25 And also the team, after Alabama, had no idea 26 that I was leaving my motor home back there still at 27 Josh's -- at my friend Josh's house. 28 The two California rounds I stayed with my 18 1 business partner in Fontana. So, there was no sense 2 again for me to bring it all the way back. 3 And, actually, I do stay at a hotel up in -- up 4 at Sears Point because this didn't make sense for me to 5 just put more miles on it than I needed to. 6 MS. YEE: Okay, thank you, Mr. Pridmore. 7 MR. PRIDMORE: Thank you. 8 MS. YEE: Questions? Ms. Steel? 9 MS. STEEL: Seems like what I hear from the 10 taxpayer, Department did not do enough research, that he 11 really was in the race or not. You know, some of them, 12 just like a name, you know, just look at name only. So, 13 you know, he was -- you just assumed that he was in the 14 race. So, didn't do, you know, good research there. 15 But I just heard that Department is sufficient 16 documents to make sure that it was interstate use for 17 this RV, that Petitioner shown the details of documents 18 that, you know, where he used it. I see some of them 19 here that, you know, people sign the affidavit here, 20 that if this is not sufficient enough, then what kind of 21 documents we are looking for? 22 Because a lot of times we keep raising bar 23 here. So, what kind documents you really looking for 24 if -- I understand that they don't have any log, but 25 other than that, then what you are really looking for? 26 What's really sufficient documents here? 27 MR. KWEE: Basically what we were looking for 28 is evidence that the motor home was in a certain place, 19 1 not necessarily just the Petitioner, but the motor home, 2 such as gas receipts would show that the motor home was 3 there because he was purchasing gas for the motor home 4 or other credit card statements showing that he made 5 purchases for the motor home. 6 Again service vehicle, service receipts, other 7 travel and lodging receipts. 8 MR. TUCKER: Space rental. 9 MR. KWEE: Space rental. 10 MR. TUCKER: Space rental for the motor home. 11 MS. STEEL: You can park some place else. I 12 mean, how they can just park always renting the space? 13 MR. TUCKER: Well, it -- 14 MS. STEEL: It can be parked in front of my 15 home. 16 MR. TUCKER: But it's generally not to going to 17 happen everywhere. Depending upon where they are, there 18 may have be receipts that are issued. Generally there's 19 a charge if you're staying at certain places. 20 Those are typical documents. We may see that 21 in every case, but gas receipts are critical, as Andrew 22 pointed out. 23 MS. STEEL: But you see that his job as a 24 racer, he's outside of California more than 80 percent 25 of the time. It's not accountable, I mean on the top of 26 the -- what I got affidavits here. 27 MR. HANKS: Ms. Steel, the Department has put 28 together a chronology and a test and examination to see 20 1 whether or not the Petitioner qualified for using the 2 motor home in commercial use during the test period. 3 And our analysis indicated that that qualifying 4 use was only 21 percent. And we did recognize that the 5 motor home, of course, was out of state. We have 6 accepted the information that Petitioner supplied 7 regarding the use of the motor home out of state, but 8 that use just didn't -- wasn't sufficient to rebut the 9 presumption that the vehicle was used in California. 10 MS. STEEL: So, affidavits are not working? 11 MR. HANKS: Correct, that wasn't sufficient. 12 MS. STEEL: Let me ask taxpayer, you bought, 13 I mean, gas and, you know, do you have any of those 14 receipts? 15 I mean, it seems like they provide for a couple 16 and few. 17 MR. PRIDMORE: Yeah, that was the biggest 18 problem is that, you know, we just didn't have enough. 19 I did actually -- 20 . 21 MS. STEEL: Can go back to credit card 22 company? 23 MR. PRIDMORE: Yeah, I mean the thing is there 24 were a lot of times when somebody else was driving it 25 for me, like because I -- I couldn't be in all the 26 places at one time. So, there was places when the team 27 would take it and drive it for me or even our driver 28 from the schools would. 21 1 MS. STEEL: Do you reimburse those gas 2 mileage and gas money? 3 MR. PRIDMORE: I didn't, no. 4 MS. STEEL: You don't? 5 MR. PRIDMORE: No. 6 MS. STEEL: Who was driving for you? 7 MR. PRIDMORE: Well, at the time, riding for; 8 the Michael Jordan team, they were just taking care of 9 it for me. They would just take and I wouldn't have 10 to. 11 MS. STEEL: Do you have any contract that they 12 going to take care of the all the gas? 13 MR. PRIDMORE: No, they were just kind enough 14 to do it a lot of times, you know, especially if I drove 15 behind them, if I was with the team or even with my 16 schools, it would just go on a school credit card or it 17 would go on their credit card, the race team's credit 18 card. 19 But as far as like places to stay and rent and 20 things like that, I mean, I totally agree in the sense 21 that, you know, there is going to be storage fees. 22 Because I stored my motor home in 2007, but I had people 23 all across the country -- I've done it for so many years 24 and I have friends everywhere, and a lot of times, you 25 know, stay in rest areas or Wal-Mart parking lots are 26 great too, you can pull in those things at night. 27 So, it wasn't a matter of having to go find 28 campsites or whatever, we just -- I just stayed right 22 1 off the interstate, wherever it was that I was driving 2 it anyways. 3 MS. STEEL: Thank you. 4 MS. YEE: Thank you. 5 Ms. Mandel, did you have a question? 6 MS. MANDEL: Well, I kind of had the same 7 thoughts that the Petitioner did about what he might be 8 doing on the drives. And some of those -- some of those 9 drives, you know, may -- you know, the other side of the 10 Continental Divide, things are a lot closer than we're 11 used to out here. And you can make some of those drives 12 without necessarily having to overnight somewhere. 13 And I don't know if there is a charge for 14 hookup at the track -- and I am familiar with people who 15 ride different types of circuits using motor homes 16 rather than doing the hotel thing. They do it for a 17 variety of reasons. But I was a little -- on the coming 18 back to California, I think I heard staff say something 19 which was not what Mr. Pridmore -- not what I heard Mr. 20 Pridmore say. 21 What I heard him say about the motor home 22 coming back to California was that it was brought back 23 here without his knowledge and that other people on the 24 team made an assumption that he would want it in 25 California and that he was in intensive care and was not 26 consulted. 27 So, that as far as he was concerned, it -- it's 28 coming back to California sounds like it falls more into 23 1 the, you know, changed circumstances beyond your 2 control, what are you supposed to do if you are 3 unconscious and in intensive care and somebody assumes 4 that now that you have this piece of -- this RV that you 5 are going to want to use it in California the way they 6 saw you use it wherever -- wherever he was at the time 7 that he was injured. 8 And what I heard staff say was that the fact 9 that it came back and was brought to a track where the 10 next race was showed that he intended to use it in 11 California. 12 So, I -- I mean understand you may -- you maybe 13 just heard him talk about it this morning and, you know, 14 that was your take away, but maybe you guys can address 15 that, because it wasn't quite what I heard him say. 16 MR. KWEE: Basically, I had -- I might have 17 misunderstood him, but I had thought he said that 18 pursuant to like maybe a suggestion that like pursuant 19 to the prior plans that the vehicle was to be brought to 20 that race track and then it was brought pursuant to 21 those plans without his knowledge. 22 But then I thought that was occurring pursuant 23 to like some plan that they had previously agreed on 24 before he was injured. 25 I might be mistaken. I apologize if there was 26 a misunderstanding. 27 MS. MANDEL: Did I hear you -- 28 MR. PRIDMORE: You're correct. And the team 24 1 just did what they thought -- they thought they were 2 doing me a favor by doing that for me because, you know, 3 everybody leaves Sunday night. And, unfortunately, the 4 people that would have helped me make the decision were 5 all at the hospital with me, they weren't really 6 concerned about my motor coach at the time. 7 So, they -- I even -- Darren brought the thing 8 back home for me just to do it for me. Normally there's 9 two guys in each semi when they drive across country. 10 MS. MANDEL: Yeah, the semis ar to bring the 11 bikes, right? 12 MR. PRIDMORE: So, what they did is they let 13 one of the guys, one of the semis drive my motor home 14 behind the two semis back across the country. 15 So, people were just swapping off driving it 16 back for me because I wasn't planning on bringing it 17 back. 18 In fact, on Tuesday, when I kind of woke up a 19 little bit, I was like, where is the motor home? And 20 they said it's driving back home and that wasn't 21 necessarily my intent. 22 Because the California rounds, like I said, I 23 usually just stay some place else at those. 24 MS. MANDEL: Okay. And what about hookups at 25 the tracks, are those arranged? 26 MR. PRIDMORE: Yeah, they're all -- you know, 27 that's for the riders and stuff, that's all, you know, 28 free of charge, nothing. 25 1 Every track has a place for you to have hookups 2 and stuff like that and that's all free of charge. 3 It's -- I think as participants you don't get charged 4 for that. 5 And it's funny that you mentioned that because 6 Laguna Seca is the only one that they do that for, it's 7 like they -- 8 MS. MANDEL: That they do what for? 9 MR. PRIDMORE: That they charge you for hookups 10 and stuff. Another reason why I didn't bring it because 11 they're like a $1,000 for the weekend. 12 So, I was like why would I drive it all the way 13 back across the country and then get charged for that 14 too? 15 So, anyways -- 16 MS. MANDEL: Do you -- are there any -- do you 17 think that there's available information from the tracks 18 about whether they charge or not for hookups? 19 MR. PRIDMORE: About the only thing you would 20 get charged for, at maybe two of the events that I can 21 think of, is just like sewage dump and stuff like that. 22 They have a truck that would come around, but I can -- I 23 can -- 24 MS. MANDEL: I am just wondering if it's -- 25 MR. PRIDMORE: -- get information from the 26 tracks. 27 MS. MANDEL: -- I'm just wondering what 28 information might be available about that. 26 1 Because certainly if, you know, if the 2 out-of-state tracks generally don't charge and Laguna 3 Seca, you know, charges, I guess, Mr. Tucker, you have a 4 thought? 5 MR. TUCKER: Just -- just to come back, one of 6 the problems that we see with this, we understand that 7 this is -- unfortunately, it's all about documentation. 8 And that's been the problem is how to -- how to deal 9 with this. 10 But when it comes back to intent, the further 11 complication is this was registered for use in 12 California. 13 MS. MANDEL: No, I understand it was registered 14 for use in California and I -- or registered -- I am 15 sorry -- 16 MR. TUCKER: Registered in California. 17 MS. MANDEL: -- it was registered in 18 California and he's a California resident. And he 19 bought it from a California dealer, even though it was 20 delivered out of state and so I can -- I understand that 21 it was registered in California, which is he's a 22 resident and that kind of gives you a presumption. 23 What I -- what I am actually focused on is the 24 potential for the interstate commerce exception. And I 25 don't remember the details of the mileage that you guys 26 put together, whether you were counting miles every time 27 from where it was to the next location of a race or if 28 you were only counting miles from where it was picked up 27 1 to where you know it was stored for the first time and 2 the driving from wherever it was, Arkansas or someplace, 3 you know, I don't remember the details of the mileage. 4 And I understand you have to show, you know, 5 that it was commercial miles, so, all in connection with 6 his business and that he, you know, didn't go tour the 7 Grand Canyon or something in it. 8 But I am not sure what miles you picked. And 9 part of your argument had been that he hadn't -- you 10 didn't think he showed by pieces of paper that he had 11 the RV with him when he says that he stayed in the RV at 12 the tracks. And, you know, a lot of times we get these 13 cases and the people aren't actually here to talk about 14 what they -- what did they and to judge them. 15 But I am just wondering -- I understand about 16 the presumption and that we're not necessarily on a, you 17 know, 50 percent thing, but I'm kind of focused on the 18 interstate commercial miles. 19 MR. TUCKER: Ms. Mandel, my understanding is 20 that wasn't an argument that he raised, that's one that 21 staff actually raised on his behalf. 22 MS. MANDEL: Right, but -- 23 MR. TUCKER: So, we -- 24 MS. MANDEL: -- I probably would have raised it 25 today anyway. So, I -- 26 MR. TUCKER: I understand. 27 But, so, we -- we -- I'll say -- I should say 28 staff, I didn't have anything to do with it, they pieced 28 1 together, with the best information they had, they 2 looked at and did research on their own and tried to, in 3 their -- based on what limited information they have, 4 they computed or calculated what they deemed to be 5 commercial miles, without the benefit of this additional 6 information that was presented to us today. 7 That might have changed things if we had a 8 chance to look at it and corroborate some of that 9 information. 10 MS. MANDEL: Okay. And then on the changed 11 circumstances, now I've confused myself, but, you know, 12 if he really intended to use it out of the state, even 13 though it was registered here and we have the 14 presumption and everything, and he's, you know, knocked 15 out in a hospital bed somewhere and it happens to come 16 back because they think they're doing him a big favor, 17 what's the -- what's the rule on how changed 18 circumstances -- impacts -- 19 MR. TUCKER: Typically, we -- 20 MS. MANDEL: -- intent? 21 MR. TUCKER: -- typically we look at 22 circumstances that occur beyond one's a control. 23 I am not -- when did it come back for repair 24 work? Is that the same -- 25 MR. PRIDMORE: May 2nd. 26 MR. TUCKER: -- the same? 27 MR. HANKS: May of '05. 28 MR. TUCKER: The fact that it was brought back 29 1 for repair work -- 2 MS. MANDEL: Well, okay, and what I heard him 3 testify to was he knew it had to have something done, 4 warranty stuff, and that he just sort of thought, well, 5 they brought it back, they happened to bring it back to 6 the place -- the track that is next to the place that 7 was the dealer, so, hey, it's here, I may as well have 8 the work done. 9 MR. TUCKER: Typically we've looked at change 10 of intent, for example, in the case of servicemen who 11 are issued orders after they make a purchase and then 12 are transferred here and they had no idea whatsoever 13 that they might be coming to California. 14 We might also see it if it -- if there were a 15 Katrina-like event that suddenly the population is 16 forced to move and they never anticipated coming. 17 The fact that it was registered in California 18 at the time of purchase, we find troubling. Because 19 that makes it appear that it was intended to come to 20 California at some point. 21 MR. HANKS: Also the fact that some of these 22 races occurred in California was an indication to us 23 that -- that there was a presumption on his part that he 24 would be using the motor home at those races here in 25 California. 26 MR. TUCKER: If he hadn't been injured, 27 perhaps. We don't know. 28 MR. HANKS: Actually, in this case we've 30 1 probably got more information to calculate that 2 commercial mileage use than we do in many of these 3 cases. 4 Because what we have received from the 5 Petitioner are copies of his independent third party 6 statements from friends that identify where the motor 7 home was parked during certain periods. 8 Also he's provided his race schedule that we've 9 looked at and made the presumption that the motor home 10 was at these races and it's during those time periods. 11 We've corroborated that with information from the 12 internet and then, moreover, we do have some of the 13 service records that identify when the vehicle then came 14 back into California and received its requisite 15 servicing. 16 Actually, the amount of detail we have in this 17 case is fairly extensive. 18 MS. MANDEL: Okay. And then the new detail 19 today, I guess, is the school schedule. 20 So, I guess we'd have to look at where you 21 calculated miles from what to what. You were working 22 off a race schedule and I do know that your memo talked 23 about a 2006 race schedule, but the only race schedule I 24 have in front of me is the 2005 race schedule. 25 So, I'm just wondering if is more mileage to 26 compute? 27 MR. KWEE: The reason why we mentioned the 2006 28 schedule is because we didn't have a recording of the 31 1 mileage until May of 2006. 2 But the 12-month test period ended on March of 3 2006. So, what we used the 2006 schedule is to 4 determine known miles traveled outside the test period 5 and then we subtracted that from the total mileage that 6 we had recorded on the odometer. 7 So, that wasn't used with -- for calculating 8 miles within the 12-month test period. That was just to 9 determine miles that we knew were driven outside the 10 test period. 11 MS. MANDEL: Okay. But were there -- were 12 there -- were there races in 2006 before May 2nd that 13 you might have -- they're outside -- well, anyway, it 14 just seems to me that there might be information to -- 15 MR. PRIDMORE: Yeah, the first race of the year 16 is Daytona every year. So, it would have been the first 17 week of March in 2006. 18 So, there was no races in California. 19 MS. MANDEL: You're holding your head, am I 20 making you -- 21 MR. LEVINE: No, no, no. 22 MS. MANDEL: -- giving you a headache? 23 I'm just wondering if we have more information 24 to try to calculate miles, but -- than you had before 25 between -- and the taxpayer maybe hasn't gone down that 26 road of trying to calculate miles. 27 MR. KWEE: That's correct. And what we did is 28 this calculation in the schedule that we had and we 32 1 accepted everything that the Petitioner had stated as 2 true and used that to determine the mileage known within 3 the 12-month test period. 4 This schedule here (indicating), although it 5 does have additional dates, I note that, you know, like 6 for June 13th and June 14th and June 20th and June 21st, 7 for example, his manager wrote a letter stating that the 8 vehicle was stored in Wisconsin from June 6 to 9 July 17th, so, right off the bat, you know, not every 10 date in this schedule would be consistent with the motor 11 home being at that location, although -- 12 MS. MANDEL: Have you ever driven from -- where 13 in Wisconsin? 14 MR. PRIDMORE: Just south side of Milwaukee, 15 but part of that schedule -- 16 MS. MANDEL: Okay, that's an hour and a half 17 from Chicago, so -- 18 MR. PRIDMORE: Exactly, Joliet, Illinois. 19 MS. MANDEL: -- it's not that far from there 20 either, but -- 21 MR. PRIDMORE: I did a lot of events there 22 because of my association with Jordan and all that right 23 in Chicago. 24 MS. MANDEL: And I think that the Petitioner's 25 counsel has been focused on interstate commerce and 26 says, hey, it was just out of state and it's really 27 commercial miles used in his business. 28 He has two parts to his business, which is 33 1 racing with the team and running the schools. And I can 2 tell you that I -- unless I missed it, I may have missed 3 it in the materials, I wasn't -- I kind of thought of 4 the schools as being in Ventura and not on the road. 5 So, I'm just wondering -- 6 MR. ASSANTI: Ms. Mandel, if I may talk? 7 MS. YEE: Mr. Assanti? 8 MR. ASSANTI: We've supplied prior to this -- I 9 know there was some issue as to what -- to prove 10 Mr. Pridmore was at these races, actually, but I know 11 prior to this, in our first petition that we filed, we 12 did supply all of the results for the entire season of 13 all the riders and it shows a clear blank space between 14 the California Speedway race -- I am sorry, the second 15 round of the Alabama race, which is when he was hurt, he 16 scored no points, and then all the way from there up 17 until the Laguna round when he scored 21 points, he was 18 absent. 19 And, so -- also the other thing is is that the 20 first race in 2006 is -- we supplied a declaration by 21 both Mr. Mujar and also Josh Hays. Well, Mr. Hays lives 22 in Mississippi and, so, that RV was stored and I believe 23 you took it from Mississippi to Daytona for the first 24 race of 2006. He didn't take it from California. 25 As we have contended all along, the vehicle 26 just wasn't in the State of California, except for that 27 service that we had talked about. I mean -- I don't 28 know how you can even begin to question the miles when 34 1 the vehicle only came in and left because of the 2 service. And it was out of the state the rest of the 3 time. 4 MS. MANDEL: Right, but for the interstate -- 5 for the interstate commerce exception, it's based on 6 miles used in business. 7 MR. ASSANTI: 100 percent. 8 MS. MANDEL: And, so, that was why he was 9 talking about miles. 10 MR. ASSANTI: It was 100 percent, 100 percent 11 he used it for his business. He's so busy now it's hard 12 for me to get a hold of him, even now that he's not 13 racing, but during then, when he was racing 14 professionally in this country, he was on the road all 15 the time. 16 And, so, there's been never an allegation, 17 never any -- any admission by Mr. Pridmore that he ever 18 used this vehicle other than interstate commerce. And 19 that's why it was purchased, primarily why it was 20 purchased. So -- 21 MS. YEE: Thank you, Ms. Mandel. 22 Other questions? 23 Ms. Alby, please? 24 MS. ALBY: I guess for me it's still troubling 25 the lack of documentation on the -- for instance, 26 mileage or the gas receipts and whatnot. 27 And I'm just amazed that you -- I heard you a 28 little bit ago, I think, say that when some of your 35 1 associates actually bought the gas and you didn't have 2 to reimburse them and that's lovely -- that's amazing to 3 me. 4 How does that happen? I mean, is that -- 5 convince me because I'm not -- 6 MR. PRIDMORE: No, no, it's okay. A lot of 7 people don't even understand what I do is a business, 8 racing. 9 But when you're part of a huge race team, like 10 I was, and currently still am a little bit, you know, 11 stuff like gas receipts to drive my motor home -- you 12 know, also, you know, I had friends that would put 13 trailers on the back of my motor home and drive it to a 14 race. So, they are hauling their own stuff, so, they 15 would pay for gas on their own. I have got a couple of 16 friends that, in fact, did that. So -- 17 MS. ALBY: You even said when you were trailing 18 them -- 19 MR. PRIDMORE: Sorry? 20 MS. ALBY: -- you would be driving -- you even 21 testified that when you were driving behind them, they 22 would actually pay for your gas? 23 MR. PRIDMORE: Possibly, you'd pull into a big 24 truck stop and, I mean, not all the time, please 25 understand that there was times where I was on my own a 26 lot too and I did -- I got fuel -- but a lot of times 27 they would just throw it all on the same credit card, 28 you know, "Don't worry about it." 36 1 I mean, we're talking about teams that have 2 huge budgets and, you know, worrying about filling up my 3 motor home wasn't like a maybe a big deal to them, trust 4 me. 5 MS. ALBY: Big bill to me. 6 MR. PRIDMORE: I was very appreciative, trust 7 me, yeah. 8 So -- but that's the truth. 9 MS. ALBY: With the Department, with this new 10 information, is it -- is a 30-30-30 worth looking around 11 here? 12 MR. HANKS: I think it probably is. 13 And we haven't incorporated this information 14 into our calculations and it could be that that might 15 change the percentage that we calculate that qualifies 16 as qualifying commercial use. 17 So, yes, I recommend that. 18 MS. ALBY: Okay. 19 MS. YEE: Ms. Alby, do you want to make a 20 motion? 21 MS. ALBY: I do, I would like to move 30-30-30. 22 MS. YEE: Okay, we have a motion by Ms. Alby to 23 move for a 30-30-30 on this matter. 24 May I have a second? 25 MS. MANDEL: Second. 26 MS. YEE: Second by Ms. Mandel. 27 Without objection, that motion carries. 28 Mr. Levine, will you do the pleasure of 37 1 describing this for everyone? 2 MR. LEVINE: Yes, if I can add just something? 3 You'll have 30 days to submit any further 4 information. I suggest you do your own schedule of 5 mileage, also intrastate, which doesn't count, so, you 6 go -- the motor home within Illinois, you need to 7 schedule that mileage and I will tell you it doesn't 8 count towards the interstate, it's not really an 9 exemption, but that provision, and chart as many of the 10 miles as you can and any supporting documentation. 11 Then the Department will take your schedule, do 12 its schedule, or agree with yours and they'll have 30 13 days to do that and then it comes to Appeals. 14 We review it. We make our own recommendations 15 to the Board, who'll make the final decision. 16 You won't have to come back. 17 MS. YEE: Okay. 18 MR. PRIDMORE: Thank you very much. 19 MS. YEE: Thank you both very much for coming 20 forward. 21 Thank you, Mr. Levine. 22 ---o0o--- 23 24 25 26 27 28 38 1 REPORTER'S CERTIFICATE. 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, JULI PRICE JACKSON, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 JUNE 18, 2010 I recorded verbatim, in shorthand, to the 10 best of my ability, the proceedings in the 11 above-entitled hearing; that I transcribed the shorthand 12 writing into typewriting; and that the preceding pages 1 13 through 38 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: July 19, 2010 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 39