Diamond National Corp. v. State Board of Equalization

These combined appeals from two actions for refunds of state and local sales taxes paid to the State Board of Equalization in 1968, consolidated for trial on stipulated facts, raise the question of whether, pursuant to Revenue and Taxation Code section 6052, the legal incidence of the California taxes falls on the púrchasing national bank (Crocker), or on the retailer-vendor (Diamond). The parties agree that if the legal incidence of the tax is on Crocker, it is barred by former 12 United States Code section 548 . For the reasons set forth below, we have concluded that under California law, the legal incidence of the tax is on the vendor-retailer, and the judgment in favor of Diamond in No. 35143 must be reversed, and the judgment of dismissal as to Crocker in No. 35698 affirmed..

As the facts were stipulated, we set forth briefly only the basic facts pertinent to the central legal issue before us. Diamond supplied printed forms and other items of tangible personal property to Crocker for use in its business as a chartered national bank. The parties understood and agreed that the item prices stated by Diamond were exclusive of “sales tax reimbursement,” which would be…