MacY's Department Stores, Inc. v. City & County of San Francisco

The City and County of San Francisco (the City) appeals a judgment that awarded Macy’s Department Stores, Inc., and four related corporations (Macy’s) a multi-year tax refund. The City argues that (1) Macy’s 1995 and 1996 refund claims were untimely, (2) the trial court erred by refunding all local business taxes paid by Macy’s during the contested period instead of the amount sufficient to negate the discriminatory effect of the tax, and (3) the rate of prejudgment interest should have been derived from a local ordinance rather than state law. We conclude Macy’s tax refund must be limited to an amount sufficient to cure the discriminatory effect of the tax. So, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

Pursuant to City ordinances in effect between 1995 and 1999, a business that operated in San Francisco was required to calculate its tax liability separately under payroll expense and gross receipts taxes, and to pay the greater of the two amounts. (S.F. Mun. Code, pt. Ill, former arts. 12-A & 12-B.) In April 2001, the City repealed the gross receipts tax, effective January 1, 2000. (S.F. Ord. No. 63-01, § 1.)

On January 28, 1999, Macy’s filed claims with the City…