Marble Mortgage Co. v. Franchise Tax Board

Respondent, Marble Mortgage Company (hereafter referred to as Marble), was successful in the trial court in this action for a refund of a portion of the California franchise tax paid under protest for its fiscal years ending September 30, 1956, September 30, 3957, and September 30, 1958. On this appeal by the State Franchise Tax Board (hereafter referred to as the state), the sole question is one of law, i.e., whether Marble was a *'1 financial corporation” within the meaning of that term as used in section 23183 of the Revenue and Taxation Code, and therefore taxable at the rate imposed on banks, as the state contends, or whether Marble was a general corporation taxable at the rate imposed pursuant to section 23151 of the Revenue and Taxation Code. The propriety of taxing Marble at the bank rate turns on the question of whether the activities of Marble were in substantial competition with national banks (Crown Finance Corp. v. McColgan, 23 Cal.2d 280 [ 144 P.2d 331 ]; Morris Plan Co. v. Johnson, 37 Cal.App.2d 621 [ 100 P.2d 493 ]).

The matter was tried on the following uncontroverted facts: During the period of time here involved, Marble was engaged in the business of initiating…