Christman

This is an appeal from a judgment entered upon a written stipulation of facts. Suit was brought by the respondents to recover sums paid under protest to the California Franchise Tax Board after their pursuit of administrative remedies was exhausted. Upon the ruling that respondents were entitled to a tax credit under Revenue and Taxation Code section 18001, appellant brought this appeal.

Facts

In 1965, Chris Motors Corporation (Corporation) was formed under the laws of the State of Georgia, where it located its principal place of business. Theo Christman, the only Californian among the Corporation’s three shareholders, has at all material times owned 22 percent of the Corporation’s stock. From the inception Mr. Christman has been involved in the operation of the Corporation, performing duties in California and in Georgia during temporary journeys there which have averaged three per year in number. Prior to 1968, Mr. Christman was compensated for his services as a vice president of Chris Motors, but a change in the Corporation’s tax status terminated the remunerative arrangement.

In 1965, Mr. Christman was required to pledge and deliver to a Georgia bank all his stock…