Touche Ross & Co. v. State Board of Equalization

Touche Ross & Co. (hereafter Touche Ross) filed an action pursuant to Revenue and Taxation Code section 6934 for recovery of sales taxes and interest paid under protest to the State Board of Equalization (Board) upon the sale of a business. On the parties’ cross-motions for summary judgment, the trial court held in favor of Touche Ross on its claim that certain computer programs included as part of the sale were exempt from sales tax under section 6010.9. The court held in favor of the Board on its contention that the sale was not an exempt “occasional sale” under section 6006.5, subdivision (a). Both parties appeal.

Facts

The facts are stipulated. On April 20, 1977, Kaiser Industries Corporation (KIC), a Nevada corporation, adopted a voluntary plan of complete liquidation. Touche Ross, which had served since 1947 as KIC’s independent accountant, was selected as liquidation agent. At the time it adopted its liquidation plan, KIC had three unincorporated divisions: Kaiser Engineers (KE), which provided engineering services in connection with commercial construction projects; Kaiser Sand and Gravel (KSG), which engaged primarily in excavation and retail sale of sand,…