Debtor Reorganizers Inc. v. State Board of Equalization

Plaintiff Debtor Reorganizers, Inc. appeals from a summary judgment in favor of defendant in plaintiff’s action to recover use taxes in the sum of $27,905.60 paid by plaintiff’s assignor Fat Jones Stables, Inc. (hereinafter referred to as “Stables”), in respect of which a claim for refund was made by Stables and denied by defendant board. The taxes in question were for the period January 1, 1966 through October 12, 1969, during which period Stables was engaged in the business of selling and leasing equipment and livestock which had been purchased from a trustee in bankruptcy in the course of liquidation of a bankrupt estate pursuant to an order of the United States District Court.

Stables collected and remitted sales taxes on all outright sales of such livestock and equipment each quarter as the sales were made. It did not pay sales or use taxes in respect of the rental receipts of livestock and equipment leased by it. Defendant board served a notice of determination requiring payment of “use tax applied to rental receipts derived from petitioner’s leases of livestock and equipment purchased from the trustee in bankruptcy .. . .” Payment was made by Stables in accordánce…