Mercedes-Benz
Mercedes-Benz of North America, Inc. v. State Board of Equalization
Opinion
Opinion
Kingsley, J.
Plaintiff taxpayer appeals from an adverse judgment in its action to recover taxes. We affirm.
Under the California use tax law, a merchant who imports into the state merchandise for sale would ordinarily pay no tax under that law but would pay a sales tax on the value of the merchandise if and when sold. However, if such a merchant imports merchandise under that theory and thereafter uses it for purposes other than “retention, demon stration or display” he is subject to a use tax. Under the applicable statute (subd. (a) of § 6244 of the Rev. & Tax. Code) and the regulation adopted thereunder (Cal. Admin. Code, tit. 18, reg. 1669, subdivision (a)) the tax base is “the price paid by” the merchant.
Plaintiff here does not dispute its obligation to pay a use tax, since it admittedly has used motor vehicles for purposes other than retention, demonstration or display. It here contends that, as to it, the tax base should have been the cost to the manufacturer of the vehicles involved of the raw materials used in the manufacture. We reject that contention.
Taxpayer here is a Delaware corporation, duly authorized to do business, and transacting business, in California. It is a…