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 JULY 25, 2012 10 SALES AND USE TAX APPEAL HEARING 11 APPEAL OF 12 RICHARD J. ROBLEDO AND GLORIA M. ROBLEDO 13 NO. 483571 (KH) 14 AGAINST PROPOSED ASSESSMENT OF 15 SALES AND USE TAX 16 17 18 19 20 21 22 23 24 25 26 Reported by: Kathleen Skidgel 27 CSR No. 9039 28 1 1 P R E S E N T 2 For the Board Jerome E. Horton of Equalization: Chairman 3 4 Michelle Steel Vice-Chairwoman 5 6 Betty T. Yee Member 7 8 George Runner Member 9 10 Marcy Jo Mandel Appearing for John 11 Chiang, State Controller (per Government Code 12 Section 7.9) 13 Joann Richmond 14 Chief Board Proceedings Division 15 16 For Board of David Levine Equalization Staff: Tax Counsel IV 17 18 For the Department: Erin Dendorfer Tax Counsel 19 Robert Tucker 20 Assistant Chief Counsel 21 Kevin Hanks Chief, Headquarters 22 Operations Division 23 For Petitioner: Richard J. Robledo Taxpayer 24 Gloria M. Robledo 25 Taxpayer 26 Alex Buzas Representative 27 28 ---oOo--- 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 JULY 25, 2012 4 ---oOo--- 5 MR. HORTON: Ms. Richmond, our next item. 6 MS. RICHMOND: Our next item on today's agenda 7 is C8, Richard J. Robledo and Gloria M. Robledo. 8 Please come forward. 9 MR. HORTON: Mr. Levine, as they come, would 10 you please introduce the issues in this case? 11 MR. LEVINE: Good afternoon, Chairman Horton, 12 Members. David Levine for the Appeals Division. 13 The issues in this petition are whether 14 Petitioners purchased the subject motorhome for use in 15 California and whether additional relief of interest is 16 warranted. 17 MR. HORTON: Uh, thank you very much. 18 Would the taxpayer please introduce themselves 19 for the record? You will have ten minutes to make your 20 presentation. Uh, we will return and allow you an 21 additional five minutes on rebuttal. 22 MR. ROBLEDO: I am Richard Robledo. 23 MS. ROBLEDO: I'm Gloria Robledo. 24 MR. BUZAS: And I'm Alex Buzas, uh, an intern 25 with the Taxpayers' Assistance Program. 26 And, uh, thank you for hearing our case today, 27 Mr. Chairman and Members of the Board. 28 Uh, we're here to discuss the purchase of a 3 1 motorhome in, uh, September 2003. Our clients were 2 contemplating, uh, retiring in Nevada, a place that they 3 vacation regularly, and, uh, were shopping for a 4 motorhome. 5 During the process of shopping, the salesman, 6 uh, found out that they vacationed in Nevada and were -- 7 were going to use the RV there and had planned on 8 retiring there. So he suggested that they get the RV 9 delivered out-of-state. 10 They did that. They followed the procedure. 11 And a week after, uh, getting delivery of the RV 12 out-of-state, they started experiencing major 13 malfunctions with the -- with the vehicle. The vehicle 14 would shake. The brake system, which, uh, ended up 15 being recalled, uh, caused the motorhome to violently 16 shake when the brakes were tapped. The windshield would 17 start shaking; eventually it popped off. 18 So they took the -- they checked into, uh, any 19 repair service centers in Nevada that could fix the 20 Workhorse chassis, which was the problem, ended up being 21 recalled. There were no authorized dealers there to do 22 it. The vehicle being brand new, uh, and under 23 warranty, they took it back to the dealer that they got 24 it from in California where they tried to have the 25 problem resolved a couple times during the six-month 26 test period. 27 They would drop it off, pick it up, take it 28 back to Nevada, experience the same problem on the 4 1 drive, have to bring it back in. Um, so it ended up 2 being in California for 72 days getting repaired during 3 the -- during the six-month test period. 4 Um, even given that, they were only out of 5 California 54 percent of the days. It's obviously 6 ten -- ten years ago at this point and it's hard to get 7 documentary evidence of when and where they were on any 8 given day. 9 So, we believe, and he -- Mr. -- Mr. Robledo 10 believes, that he was fly-fishing in March at Diamond 11 Lake in Nevada because that's when -- that's a time the 12 fish spawn. It's what he does every year. We don't 13 have any documentary evidence of this, but -- so we have 14 not been able to resolve the issue given the objective 15 test because of the documentary issues involved. 16 However, um, cases have held that the 17 presumption may be rebutted when the taxpayer 18 demonstrates that he purchased the vehicle with an 19 intention of using it out of the state. This is a 20 two-part test. At the time of the purchase, whether the 21 taxpayer did or did not intend to use it in the State of 22 California, they vacationed all the time at this lake 23 right above Reno in Nevada. They intended to use it 24 there. The Board -- or the Department agrees that they 25 intended to use it there at the time of purchase. So, 26 that -- that -- the first part of the test isn't under 27 contention. 28 The second part of the test is whether a change 5 1 of circumstances beyond the taxpayer's control required 2 the vehicle to come back into California. And at this 3 point the Board has -- or the Department has said that 4 the recall is beyond their control obviously. We've 5 provided you with the letter that the taxpayers were -- 6 were given by the manufacturer of the vehicle. 7 Um, it says that they need to get it repaired 8 immediately, that the state of the vehicle would not be 9 under federal vehicle standards if they don't. 10 They tried to find a Workhorse chassis dealer 11 in Nevada. There weren't any authorized. The nearest 12 authorized dealer was in California. It wasn't where 13 they purchased it. But given that it was a brand-new 14 vehicle under warranty, why would you choose to take it 15 to a different dealership in California other than the 16 one you purchased it at? 17 And, uh, so the Board -- or the Department's 18 position at this point was that the -- the taxpayers 19 chose to take the vehicle into California, whereas there 20 were no authorized dealerships or repair centers in 21 Nevada. The vehicle was under a warranty where all 22 repairs would be made, and no -- that they didn't have 23 any other options. 24 And that's our position. 25 MR. HORTON: Thank you very much. 26 We'll now go to the Department. The Department 27 will have ten minutes to make their presentation. We 28 would ask that you commence with your introductions for 6 1 the record. 2 MS. DENDORFER: Mr. Chairman and Members of the 3 Board, I'm Erin Dendorfer from the Board's Legal 4 Department, along with Robert Tucker and Kevin Hanks 5 representing staff. 6 We concur with the Appeals Division's 7 recommendation that the petition for redetermination 8 should be denied because Petitioner has not overcome the 9 presumption that the motorhome was purchased for use 10 outside of California. 11 As relevant here, when a vehicle is purchased 12 outside of California, is first functionally used 13 outside of California, and is brought into the state 14 within 90 days of the date of purchase, the vehicle's 15 presumed to have been purchased for use in California. 16 In this case there is no dispute that the 17 motorhome was first functionally used outside of this 18 state and that the motorhome entered California within 19 90 days of the date of purchase. 20 Therefore, we turn to the issue of whether 21 Petitioner has met the six-month test to overcome the 22 presumption that the motorhome was purchased for -- was 23 purchased for use in this state. For this test we look 24 to whether this motorhome was used and stored outside of 25 California more than 50 percent of the time from 26 September 27th, the date of purchase -- or the date it 27 entered this state until March 27th. 28 During this period, the motorhome was in 7 1 California for at least 54 percent of the time; 2 therefore, it is presumed that the motorhome was 3 purchased for use in this state. 4 With regard to the change of circumstances, the 5 law requires that the intent at the time of purchase be 6 such that Petitioner never contemplated bringing the 7 motorhome into California for use in this state, and 8 that the change of circumstances be beyond the 9 Petitioner's control. 10 We note that Petitioners are California 11 residents with California driver's licenses and that the 12 motorhome was registered in California at the time of 13 purchase. 14 Accordingly, we request that the petition for 15 redetermination be denied. Thank you. 16 MR. HORTON: Thank you. 17 On rebuttal. 18 MR. ROBLEDO: Yeah, that was what they wanted 19 to do -- what they wanted to do. 20 On rebuttal, we had no control over the 21 situation as far as the recall on the brakes. We 22 received a letter from the Department of Transportation 23 advising us that this thing was unsafe and was not to be 24 upon the highways until it was repaired. 25 So we then contacted Workhorse. Workhorse 26 said, "We don't have any certified Workhorse repair 27 centers in Nevada." The nearest one was in, uh, 28 California; it was by the Nevada/California border. But 8 1 at that point in time our decision, and our best 2 decision, was to go ahead and return it to the dealer 3 that we purchased it for, which was in Fresno, 4 California. 5 They initiated the repairs on it. The other 6 repairs and the lists and lists of things that were 7 wrong with the motorhome is not the issue here. The 8 issue is that the thing was not to be driven upon any 9 highways, federal or state, because of its condition -- 10 and you should have documents to that effect -- which 11 takes it out of our control. 12 New motorhome. Planning to live in it when 13 we're not in our home. Planned on living it when we 14 spend all the time that we do in Nevada, and it was not 15 functional for that use. We didn't have any choice but 16 to bring it back here to get that repair done on it. 17 As it turned out, that had to be done several 18 times because they could not get the repairs initiated 19 and get them done. We would take it back to Nevada. As 20 soon as the thing got really, really hot, we start 21 hitting mountains, it started shaking and it started 22 changing lanes on us. 23 This brake system was a Boss brake system, and 24 it's still on recall. It's still on the Internet if you 25 go to "Workhorse Chassis" and run the vehicle ID number 26 of my vehicle. It is still on the Internet and it 27 states that it's one of the ones that was on that 28 recall. 9 1 I had no choice. I had no control. 2 First of all, once it was repaired, the bill 3 came out $7,000. It is not reasonable to think that I 4 would buy a brand-new motorhome and then spend $7,000 5 out of my pocket to get it repaired because it needed to 6 be repaired in Nevada. That's unreasonable. 7 So it didn't come back here for recreational 8 use or use in California. It came here out of necessity 9 to get the primary recall, which was the brake recall, 10 repaired. I had no choice. 11 My intention was to retire in Nevada. I'm a 12 fisherman. The lake that he mentioned earlier is 13 Pyramid Lake; it's north of Reno 26 miles. It was, uh, 14 Indian reservation time. We were unable to get the 15 records of the time that the motorhome spent at the lake 16 because it spent every March for its first three years 17 of its life on that lake because that's the fishing 18 season. That's when the Lahontan Trout run. 19 So, basically what I'm telling you is we seeked 20 a different way to do this and we had no choice. It had 21 to be fixed. It was brand new and it was unsafe. 22 MR. BUZAS: I'd also just like to add that it 23 was not -- it was not their idea to avoid the tax. It 24 was at the suggestion of the salesman. They had just 25 mentioned that they always vacationed there, had planned 26 on keeping it over there so that they didn't have to 27 spend money on gas driving it back and forth. They have 28 a vehicle that they can, uh, then hook up to the back of 10 1 it and tow once they get to where the RV was located. 2 So they had intended on retiring there, and 3 they had always vacationed there and had planned on just 4 using it in Nevada. 5 MR. HORTON: Thank you. 6 Discussion? 7 Member Runner. 8 MR. RUNNER: Yeah, let me just -- uh, first to 9 the -- to the Department -- well, let me go first to 10 clarify with the taxpayer. 11 So the only time you brought it into the state 12 from Nevada was for this ongoing repair that needed to 13 be done by an authorized -- 14 MR. ROBLEDO: Workhorse Chassis. 15 MR. RUNNER: -- chassis, recognized. In 16 order -- 17 MR. ROBLEDO: Correct. 18 MR. RUNNER: -- to get it paid for by the 19 warranty. 20 MR. ROBLEDO: Well, Workhorse doesn't allow 21 anybody to do any warranty work on their chassis unless 22 the dealership or the repair center has their 23 certification. 24 MR. RUNNER: And -- and -- and -- and in 25 California, was there -- was there anywhere else besides 26 California? 27 MR. ROBLEDO: Uh, well, we were, uh, staying in 28 Reno. 11 1 MR. RUNNER: Okay. 2 MR. ROBLEDO: The closest one was by 3 Sacramento, California. 4 MR. RUNNER: Okay. But anywhere else besides 5 California? 6 MR. ROBLEDO: Uh, no. Well -- 7 MR. RUNNER: So it had to come to California? 8 MR. ROBLEDO: We had to come to California 9 because it would have been a larger distance to go the 10 other direction or -- 11 MR. RUNNER: Which would -- which would have 12 been where? Tell me just for the heck of it. 13 MR. ROBLEDO: Uh, I believe that there's one in 14 Arizona. 15 MR. RUNNER: Okay. Okay. But you were up in 16 there -- you were already up in -- 17 MR. ROBLEDO: Reno. 18 MR. RUNNER: -- Reno. 19 MR. ROBLEDO: Reno, right. 20 MR. RUNNER: So you could have taken it to 21 Arizona, but you chose to take it over to California for 22 this repair. 23 MR. ROBLEDO: Well, uh, because it was faulty 24 and it was brakes -- 25 MR. RUNNER: Sure. 26 MR. ROBLEDO: -- uh, my best decision was to 27 take it and return it to the selling dealer. 28 MR. RUNNER: Okay. 12 1 Um, and again, the -- as soon as it got 2 repaired, you'd take it back out again? 3 MR. ROBLEDO: Correct. And we had a place up 4 there where we were paying storage, and that's where it 5 would stay. And then we had -- 6 MR. RUNNER: And you have -- and you have 7 receipts for all that, and demonstrated that that's 8 where it was? 9 MR. ROBLEDO: Yes. 10 MR. RUNNER: So you have receipts that dem -- 11 you have dates that prove when it was in -- when it was 12 in, um -- when it was in for repair -- 13 MR. ROBLEDO: Correct. 14 MR. RUNNER: -- for warranty. 15 And then you have corresponding receipts as to 16 when it was in storage. 17 MR. ROBLEDO: We have corresponding receipts 18 for the first four months of storage. 19 MR. RUNNER: Okay. Okay. 20 Let me go to the Department. Um, again, help 21 me -- help me, uh -- this -- this idea of "beyond the 22 taxpayer's control," um, how have we applied that in the 23 past? How broad is that? How -- you know, give me some 24 examples of things that, um, are beyond a taxpayer's 25 control. 26 MR. TUCKER: Principally, um, we have seen this 27 generally in the case of servicemen and servicewomen -- 28 MR. RUNNER: Okay. 13 1 MR. TUCKER: -- who -- they make a purchase of 2 a vehicle. Subsequent to the purchase, they receive 3 orders that transfer them to California. 4 MR. RUNNER: Okay. We've applied it that 5 way. 6 MR. TUCKER: Um, that is -- it's virtually the 7 only way that I'm aware of. 8 The other that we've contemplated was, um, a 9 Katrina-like event where you were -- if, for example, 10 you were in New Orleans or someplace close by, um, and 11 then you've made this purchase. Katrina happens -- 12 MR. RUNNER: So we've interpreted "beyond the 13 taxpayer's control" that narrowly? 14 MR. TUCKER: Yes. 15 MR. RUNNER: Any -- uh, any particular -- I 16 mean, is there case law or anything that forced us to 17 create that narrow -- that kind of a -- that issue that 18 narrowly? 19 MR. TUCKER: Well, I think we're just looking 20 at a strict reading of what -- 21 MR. RUNNER: Okay. 22 MR. TUCKER: -- they are or are not in control. 23 Just to clarify one thing -- 24 MR. RUNNER: Uh-huh. 25 MR. TUCKER: Um, we -- the Department has not 26 conceded that, um, there was necessarily an intent to 27 use this only outside of California. 28 We believe that by registering it for use in 14 1 California that there was an intent that it would return 2 to California. Just -- I just wanted to clarify that 3 point. 4 So we disagree with the first prong as well as 5 the second. 6 MR. RUNNER: So -- so you believe that because 7 they were registered in California, there was always an 8 intent to use it in California? Regardless of the 9 repair issue. 10 MR. TUCKER: Correct. Otherwise, if it was 11 solely intended to be used in Nevada, one would have 12 expected that it be registered and licensed in Nevada. 13 MR. RUNNER: Okay. Let me follow up on that in 14 just a moment. 15 Let's -- let's -- set aside the registration 16 issue. 17 MR. TUCKER: Mm-hmm. 18 MR. RUNNER: Um, so the Department right now 19 does not conclude that a repair that can only -- that 20 can be done in California by warranty, in order to get 21 the warranty to pay for it, is -- does not meet the 22 definition of "beyond the taxpayer's control"? 23 MR. HANKS: Mr. Runner, if -- if I could add, 24 too, I -- I noticed that the Petitioner referenced a -- 25 a website for us to look at involving this Workhorse 26 Chassis repair. And so I just brought that up on the 27 Internet. 28 I'm looking at the dealerships that -- that are 15 1 engaged in business in making these types of repairs. 2 And actually the -- the one that I -- I notice, and I -- 3 I just put my own zip code in here, but it identifies 4 various locations in California. But they also mention 5 a TEC Equipment, Incorporated location in Sparks, 6 Nevada, um, and so very close to actually where -- 7 MR. RUNNER: Okay. 8 MR. HANKS: -- where the Petitioner had their 9 motorhome. 10 MR. RUNNER: Okay. So let me just -- but again 11 that goes to this issue. But let me -- my question was, 12 again, more specific than that. We didn't -- if indeed 13 a person required warranty work to be done in the 14 state -- I mean, the -- the -- we would not meet -- 15 feel like that -- the Department would not feel that 16 that meets the "beyond taxpayer's control"? 17 MR. TUCKER: I -- I don't want to give a -- if 18 that were truly the only place it could be done, I think 19 we'd be looking at a different question. 20 MR. RUNNER: You mean -- you mean -- now let me 21 get specific here. Okay. Again, just to kind of 22 understand how this could work, they're in Reno. If he 23 could take it to Utah or he could take it to Arizona, 24 then we would say, "Oops, sorry. You could have taken 25 it those places, therefore, you had other choices." But 26 because you chose to bring it to California for your 27 repair, you would say it does not meet the taxpayer's -- 28 "beyond the taxpayer's control"? 16 1 MR. HANKS: Mr. Runner, I think I would phrase 2 it such that -- that the law makes a presumption that if 3 the vehicle's brought back into California, that it's -- 4 it's presumed to -- to be used in -- in California -- 5 MR. RUNNER: Again -- 6 MR. HANKS: -- irrespective of the reasons why 7 you bring it back. 8 MR. RUNNER: Okay. So what you're saying is it 9 wouldn't make any difference. I mean, what I'm hearing 10 you say then is that no matter what happens, the tax -- 11 that if this is the only place in the -- in the world 12 that it could get repaired, and you bring it back into 13 California for that repair, you are going to have to pay 14 the sales tax? Is that -- 15 MR. HANKS: No. It creates a presumption that 16 your purchase of the motorhome was intended to be used 17 in California. However, the law also allows you to -- 18 to go into the six-month test. If you can establish 19 that you were using the motorhome outside of California 20 for greater than 50 percent of that time in the 21 six-month test -- 22 MR. RUNNER: But what if the repairs -- that's 23 all -- 24 MR. HANKS: -- then it's exempt from tax. 25 MR. RUNNER: But you don't have control over 26 that because the amount of repair time and all those 27 other issues, right? I mean, doesn't -- isn't some of 28 that out of your control because the amount of time 17 1 needed for the repair, potentially? 2 MR. TUCKER: Arguably, one would have the 3 option of leaving it outside the state. 4 Um, I will note that -- 5 MR. RUNNER: Hold it. Hold it. Leaving 6 outside the state for what? 7 MR. TUCKER: And not bringing it in for 8 repair. 9 MR. RUNNER: And paying the $7,000 out of your 10 pocket? 11 MR. TUCKER: Or just waiting until the time 12 period has passed. 13 I -- I will note that -- 14 MR. RUNNER: Waiting the six months before you 15 get your motorhome repaired? 16 MR. TUCKER: More than half of the six 17 months. 18 MR. RUNNER: More than half. So you could park 19 it there. 20 So I guess what I'm hearing is the answer is 21 yes. If it was the only place to go and you brought it 22 in and you got it repaired under -- because the -- 23 because of a recall, that automatically would mean that 24 you -- that was not beyond the taxpayer's control, 25 therefore, tax would be owed. 26 MR. TUCKER: I -- I don't believe -- 27 MR. RUNNER: If that's the answer, it's okay. 28 MR. TUCKER: I don't believe. 18 1 MR. RUNNER: It's not okay with me, but if 2 that's what you guys think, that's okay. 3 MR. TUCKER: I don't believe we've seen that. 4 I know -- I'll note that for later periods, the 5 regulation was changed, the statute was changed to 6 allow -- 7 MR. RUNNER: I know. I know. 8 MR. TUCKER: Okay. 9 MR. RUNNERR: We're not talking about that 10 period. We're talking about this period. 11 MR. TUCKER: I just wanted to clarify. 12 MR. RUNNER: Okay. Okay. I just want to know 13 what the rules of the process are. Because their 14 arguments -- if that's where you -- if that's where the 15 Department is, then a lot of these other issues don't 16 make any difference, in your opinion, because you 17 brought it in. And that's what -- that's what triggered 18 the issue. 19 Okay. Let me go back to some of these other 20 issues that have been brought. Uh, number one, they've 21 identified a place in Sparks where this could have 22 gotten repaired. Uh, could you tell me about that? 23 MR. ROBLEDO: They were not a certified center 24 in that year that we needed the repair. 25 MR. RUNNER: Okay. 26 MR. ROBLEDO: So he needs to find out from them 27 when they received their certificate -- 28 MR. RUNNER: Right. 19 1 MR. ROBLEDO: -- and confirm the fact that they 2 were not available then. 3 MR. RUNNER: So -- so what you're saying is 4 there might be somebody now who could do it. 5 MR. ROBLEDO: Correct. 6 MR. RUNNER: They weren't available ten years 7 ago. 8 MR. ROBLEDO: Correct. 9 MR. RUNNER: Do we -- do we know if these 10 people were available ten years ago? 11 MR. HANKS: We don't. I -- I didn't look at it 12 previously. 13 MR. RUNNER: Okay. 14 MR. HANKS: I -- I just noticed after you had 15 commented on -- on the nature of the -- the chassis and 16 the brake repair, I just looked it up, just to see if 17 there are many locations where you can have your vehicle 18 repaired. And it looks like there are several, many, 19 many locations actually, throughout the country. 20 MR. RUNNER: But we -- we don't -- do we know 21 if they were available at the time of this issue? 22 MR. HANKS: I don't. 23 MR. RUNNER: Okay. 24 MR. HANKS: I don't. 25 MR. RUNNER: Okay. So I appreciate you looking 26 at it, but it's not material to us right now, to this 27 situation, is it? 28 MR. HANKS: But it could be. 20 1 MR. RUNNER: It could be -- 2 MR. HANKS: Because I don't know if -- 3 MR. RUNNER: -- only if they were -- 4 MR. HANKS: -- they were engaged in performing 5 those repairs at this time. 6 MR. RUNNER: Well, it could be if we wanted to 7 go in and find out if it was material to the dates, then 8 it could be. 9 MR. HANKS: Yes. 10 MR. RUNNER: But right now we don't know if it 11 is. 12 MR. HANKS: We don't know -- 13 MR. RUNNER: Okay. 14 MR. HANKS: -- for sure. 15 MR. RUNNER: Let me, um -- let me ask about 16 the -- the issue of the -- of the, uh -- the repair 17 itself. You talked about this not being able to go on 18 roads and whatnot, but yet you drove it all the way to 19 Fresno. Help me understand how that -- 20 MR. ROBLEDO: We drove it to Fresno very slow 21 and very carefully. 22 MR. RUNNER: And the window was popping out. 23 MR. ROBLEDO: What the thing -- yeah. That -- 24 that -- that was incredible. 25 What the thing would do is, when you stepped on 26 the brake after it became of operating temperature -- 27 which is probably, I'm going to guess, around 20 miles 28 down the road -- the thing would start to shimmy and 21 1 shake. 2 And then, of course, as time went on, then it 3 would start pulling from side to side. The vibrations 4 were so hard the first time that we brought it back down 5 in to take it in for its, uh, repair -- and this is when 6 it was brand-new -- the right side window, it had a 7 one-piece windshield on it -- 8 MR. RUNNER: Okay. That's good. I -- I -- 9 MR. ROBLEDO: -- popped loose. 10 MR. RUNNER: I get it was tough. Um, so I 11 guess the issue before us right now is -- 12 Oh, one other issue. Tell me about the 13 registration. Why did you register it in California? 14 MR. ROBLEDO: Uh, we followed the advice of 15 Paul Evert RV. 16 MRS. ROBLEDO: We were going -- 17 MR. ROBLEDO: In fact, we didn't even, when we 18 intended to purchase this thing, have any idea that we 19 would even consider taking it to Nevada. This is 20 something that was presented to us when we were sitting 21 in the little sales office having small talk while they 22 were doing our credit to sell us this motorhome. The 23 salesman approached us and offered us this opportunity. 24 MR. RUNNER: Okay. 25 MR. ROBLEDO: And of course -- 26 MR. RUNNER: Okay. 27 MR. ROBLEDO: -- realizing now, if I had it to 28 do over, I would never consider it. I've bought two 22 1 RV's since, and I can assure you they're both registered 2 here and the sales tax has been paid on 'em. 3 MR. RUNNER: Okay. So let me ask -- let me go 4 back to the staff then. 5 Do we, by default, believe that if a motorhome 6 is registered in the State of California when purchased 7 outside that it is automatically assumed that it will be 8 used in the State of California? 9 MR. HANKS: No. 10 MR. RUNNER: Okay. Okay. That's good. 11 MR. HANKS: We don't automatically assume 12 that. 13 MR. RUNNER: Okay. Okay. 14 Okay. So I guess the issue before us right now 15 is whether or not we would believe that 16 warranty-required repair that has to be done in the 17 State of California, that must -- that could be done -- 18 I shouldn't say only could be done, but most likely 19 could be done or needs to be done in California, whether 20 or not that triggers the issue of -- of "beyond 21 taxpayer's control" or not. 22 Right now what I'm hearing, the Department's 23 interpretation is a very narrow view of that; being 24 basically the example that we've heard which is 25 basically servicemen who have been -- service members 26 who have been transferred in. 27 MR. TUCKER: Correct. 28 MR. RUNNER: And that's how we narrowly define 23 1 that. 2 MR. TUCKER: In the -- historically, that's how 3 the agency has looked at it. 4 MR. RUNNER: Okay. Okay. Thanks. 5 MR. HORTON: Um, Member Yee. 6 MS. YEE: Uh, thank you, Mr. Chairman. 7 I, uh -- I'm, uh, sympathetic to the 8 circumstances in this case and, uh, here's why. 9 But before we get into it, I wanted to ask 10 Mr. Robledo, um, when were you aware of the, uh, recall 11 on the, uh, brake system? 12 MR. ROBLEDO: Within 30 days of purchasing the 13 motorhome. 14 MS. YEE: You didn't know at the time of the 15 purchase? 16 MR. ROBLEDO: Uh, no. I would not have 17 purchased it. 18 MS. YEE: Okay. 19 Uh, this is -- this particular recall has quite 20 a lengthy history. And, uh, it's, uh -- as you say, 21 wasn't even resolved in term of a remedy until just a 22 couple years ago. So I'm, uh -- and -- and in doing 23 some research on this, I was able to determine that, um, 24 there was even, uh, specific attention focused on 25 dealership training in order to be able to respond to 26 this problem. 27 So, um, I think, uh, it potentially, uh, could 28 have been the case that there weren't a lot of dealers 24 1 available who were prepared to address this particular 2 safety issue at the time, back in 2003. 3 Um, I -- I am, uh, sympathetic here because 4 this really all hinges on whether, uh, the, um -- 5 Mr. and Mrs. Robledo had, um -- had a sense that these 6 repairs were foreseeable or unforeseeable. And, uh, if 7 the recall wasn't even on the dealer's radar at the time 8 that you purchased the vehicle and you found out about 9 it subsequently and then tried to address it and your 10 only remedy was to bring it back to the dealership here 11 in California, uh, I'm sympathetic to them. Because I 12 don't think there was a lot of other choices with 13 respect to, um, where you could have taken the vehicle. 14 Uh, I think the intent here, although I don't 15 generally rely a lot on intent, everything that you did 16 relative to the purchase at least suggested that, um, 17 you, uh, were going to be using this motorhome, would be 18 using the motorhome exclusively outside of California. 19 MR. ROBLEDO: We had planned on moving to Reno 20 shortly thereafter. 21 MS. YEE: Mm-hmm. Mm-hmm. Uh, but for, uh, 22 these repair requirements that, uh, were presented to 23 you -- before you. 24 MR. ROBLEDO: Oh, absolutely. Absolutely. 25 MS. YEE: Okay. 26 MR. ROBLEDO: Prior to purchasing it, this was 27 part of our original plan. 28 MS. YEE: Okay. I find this a little bit 25 1 different than some of the prior cases that we've heard 2 where we're talking, uh, more about warranty repairs or 3 other types of repairs. This is a safety issue. It's 4 been a long-standing safety issue with respect to this 5 particular, uh, brake system. And, uh, certainly 6 looking at, uh, what your choices may have been at the 7 time and the fact that there may not have been a lot of 8 dealership options or other options for where you could 9 have taken the vehicle for repair, um, I -- I just 10 wanted to put that on the table. 11 I think those are all factors that, uh, we 12 generally don't have before us in your typical, uh, 13 warranty repair or, you know, for a vehicle that's been 14 purchased and brought back into California for that 15 purpose. 16 MR. HORTON: Member Mandel. 17 MS. MANDEL: I have a completely different, uh, 18 avenue because I heard you say something, sir, when you 19 were, uh, talking about, uh, what you did and the 20 fishing. 21 Uh, what I have, uh, from my notes from the -- 22 from the materials that we had was that the, um -- on 23 the six months test, that we had 72 days, uh, in 24 California based on dealer work invoices. And your 25 issue was, well, we don't really have documents for the 26 rest. 27 MR. BUZAS: We had, uh, the storage receipts 28 for -- 26 1 MS. MANDEL: Right, right. 2 MR. BUZAS: -- up until March. But March -- 3 MS. MANDEL: Right. But you didn't have them 4 for March because he wasn't in storage, is what I heard 5 him say. 6 MR. BUZAS: Exactly. 7 MS. MANDEL: What I heard him say was, "I go 8 fishing at Pyramid Lake every March when the fish spawn 9 in the spring." 10 MR. BUZAS: Mm-hmm. 11 MS. MANDEL: That's what you said. 12 And so, is that what you did with this 13 motorhome in March of 2004? 14 MR. ROBLEDO: Absolutely. That was the first 15 March after I purchased the motorhome -- 16 MS. MANDEL: Okay. 17 MR. ROBLEDO: -- and I went for the following 18 three seasons before I stopped going up there. 19 MS. MANDEL: Thank you very much. 20 Uh, because what I have is, uh, 72 days of 183 21 days is, um -- I got about 39 percent. And what I could 22 tell from the Appeals writeup was because there was no 23 storage receipts for March, because he was fishing at 24 the lake for March, those 27 days before it came in, was 25 that Appeals -- that there was an assumption that those 26 27 days were California days because he said he brought 27 it in March. Well, he brought it in in March, it sounds 28 like, after you went fishing, right? 27 1 MR. ROBLEDO: Yes, it was, yes. 2 MS. MANDEL: So the only way you got over 54 -- 3 the only way you got over 50 percent of 183 days was by 4 adding the 27 to the 72. 5 So, if he was at Pyramid Lake with that RV, 6 fishing happily, in March, those are not California 7 days, right? And then we've got -- then we pass the six 8 months test. 9 MR. TUCKER: Correct. 10 MR. HANKS: Yes. 11 MS. MANDEL: And then he doesn't have tax? 12 MR. HANKS: Correct. 13 MS. MANDEL: Correct. 14 MR. TUCKER: Correct. 15 MS. MANDEL: Okay. Well, you were fishing, 16 Pyramid Lake, March '04. 17 MR. ROBLEDO: Yes. 18 MS. MANDEL: Uh, okay. 19 Um, I -- I'd be prepared to grant -- 20 MR. HORTON: Thank you. 21 MS. MANDEL: -- on that basis. And staff is 22 looking pretty happy. 23 MR. HANKS: Well, Ms. Mandel, I think it has 24 been represented -- represented to us that -- that he 25 had driven the -- the motorhome back into California in 26 March. And so I think we're -- we're just using that 27 information. 28 MS. MANDEL: Well, I understand why you got 28 1 there because you heard "I drove it back in March." I 2 don't know -- you know, you didn't hear, I guess before, 3 that he was fishing at the lake in March the whole time. 4 He loves to fish. And that's when they spawn. Um, and 5 that's when they spawn according to the -- 6 So -- so, are you happy now? I mean, are 7 you -- 8 Huh? Yeah, I'd move to grant -- 9 MS. YEE: Second. 10 MS. MANDEL: -- on that basis. 11 MS. YEE: Second. 12 MR. HORTON: Uh, it's been -- it's been moved 13 by Member Mandel to grant in favor of the taxpayer. 14 Second by Member Yee. 15 Uh, discussion? 16 Uh, my son's a fisherman, and he can go out 17 there and stay for days, uh, and just days upon days 18 upon days upon days. And I actually got him started, 19 and sometimes I wonder why. But -- but it's a good 20 thing. 21 So there's a motion and a second. 22 Without objection, such will be the order. 23 Thank you very much for appearing before us 24 today. Uh, please enjoy your fishing. The Board just 25 ruled in your favor. Congratulations. 26 MR. ROBLEDO: Thank you very much. I 27 appreciate everybody listening and the help that you've 28 given us. 29 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, KATHLEEN SKIDGEL, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 July 25, 2012 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 29 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: August 16, 2011 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 30