May Department Stores Co. v. County of Los Angeles

—Defendants and appellants County of Los Angeles (County or Assessor), its tax collector, H. B. Alvord, and certain cities on behalf of which the County collects taxes, appeal those portions of a judgment entered in favor of plaintiff and appellant the May Department Stores Company (the May Company).

The May Company cross-appeals as to the portion of the judgment favorable to the County.

Because the trial court: (1) incorrectly ruled the Assessor had taxed the carpeting in the May Company’s stores as both structure and personal property; (2) improperly required the Assessor to consider the effect of investment tax credit (ITC) when determining full cash value of taxable property; and (3) erroneously disapproved the depreciation method applied to the May Company’s point-of-sale (POS) equipment, the judgment must be reversed in part.

Factual and Procedural Background

The May Company applied to the County’s assessment appeals board (Board) for a reduction of property taxes paid in the years 1975, 1976 and 1977. After four days of evidence, the Board upheld both the Assessor’s valuation method and valuation of the May Company’s property, and the taxes based thereon. The…