Southern Pacific Equipment Co. v. State Board of Equalization

Plaintiff appeals from a judgment entered following nonjury trial denying relief upon its complaint to recover sales taxes paid under protest to defendant State Board of Equalization (hereafter “Board”).

The case was tried upon a stipulation of facts which may be summarized as follows: Appellant is a wholly owned subsidiary of Southern Pacific Company (“SPCo.”), a common carrier by railroad operating in California, Oregon, Nevada, Utah and four other states. Appellant was organized to acquire railroad rolling stock and equipment for SPCo. It shares common facilities at SPCo.’s headquarters in San Francisco and only employs corporate officers, who are also officers of SPCo.

Appellant made various sales of cast steel railroad freight car wheels to SPCo. for use in its transportation business between January 1961 and March 1968. Each sale was accomplished under the following circumstances: SPCo. would issue a purchase order to appellant for car wheels which directed shipment of the wheels to SPCo. at locations outside California, as directed, f.o.b. Sacramento or Los Angeles (locations of SPCo. shops). Shipment was directed to be made on commercial bill of lading showing…