People Ex Rel. Flournoy v. Yellow Cab Co.

This appeal involves Yellow Cab Company’s liability for the state transportation tax on automobile carriers for a period of 11 months ending September 30, 1966.

The taxing statute is the Motor Vehicle Transportation License Tax Law (Rev. & Tax. Code, § 9601 et seq.). The tax is administered by the State Board of Equalization. Generally, the tax is imposed on “operators” who transport passengers or property for hire on public highways outside of incorporated cities. (Rev. & Tax. Code, §§ 9603, 9651.) The tax is at the rate of IV2 percent of gross receipts. Because its principal impact is on compensated transportation in unincorporated areas, it features several exclusions aimed at relieving carriers who operate primarily within cities. Thus, ever since its 1933 enactment, the statute has excluded carriers who operate wholly within incorporated cities; nor does it cover gross receipts derived from transportation wholly within incorporated cities. These two exclusions are described in subdivisions (a) and (b) of Revenue and Taxation Code section 9653. To these two exclusions the 1955 legislature added a third, set out in subdivision (c) of the same section. In effect, the…