Honeywell Information Systems, Inc. v. County of Sonoma

Honeywell, Inc. and Honeywell Information Systems, Inc. (hereinafter “appellant”) appeal from the trial court’s judgment denying relief in their respective actions brought for refund of property taxes assessed and collected on certain leased property.

The summarized facts reveal that under a three-year agreement appellant leased an electronic computer and data processing system (“computer system”) to Sonoma County Schools (hereinafter “County”) in return for payment of a flat monthly charge. By the terms of the original agreement, the County was allowed a 25 percent educational discount, which rate, however, was reduced to 10 percent under a two-year extension of the contract. While the County was free to utilize the leased equipment for hire for both educational and noneducational purposes, under the provisions of the agreement it was entitled to the educational discount only if the computer system was used for internal or joint instructional, academic and scientific programs.

The computer system was installed on the County’s premises and was operated exclusively by personnel employed by the County. Soon after the data processing center became operational in 1967-1968,…