Cambell Industries v. State Board of Equalization

Plaintiff/appellant Campbell Industries appeals from a summary judgment in favor of defendant/respondent State Board of Equalization (Board), in Campbell’s action for recovery of $662,187 in sales taxes it paid under protest on the sale of three ferry boats to the Golden Gate Bridge Highway and Transportation District. Campbell claimed the taxes were improperly assessed because the sale fell within the provisions of Revenue and Taxation Code section 6368. This statute provides an exemption from sales tax for sales of watercraft used in “interstate or foreign commerce involving the transportation of property or persons for hire.” The superior court ruled that in order to qualify for this claimed exemption, Campbell was required to prove that the principal use of the ferry boats was transportation of interstate passengers. Since the record establishes without contradiction that the ferry boats are primarily engaged in local or intrastate activities, we conclude summary judgment was proper.

Campbell manufactured and sold three ferry boats to the Golden Gate Bridge Highway and Transportation District during 1976-1977, to be used for passenger service between Marin County and…