Pacific Gas & Electric Co. v. City of Oakland

Pacific Gas and Electric Company (PG&E) filed suit against the City of Oakland (Oakland), challenging the constitutionality of Oakland’s business tax and seeking a refund of taxes paid. After granting PG&E’s motion for summary adjudication, the trial court entered judgment in favor of PG&E, awarding it $1,192,372.39 for excessive taxes paid in 1997 and $1,188,262.28 for excessive taxes paid in 1998. This appeal followed.

We will affirm.

I

Background

Prior to 1974, California Constitution, article XIII, section 14, provided that all property owned by government-regulated companies, including companies engaged in the transmission or sale of gas or electricity (public utilities), should be assessed annually by the State Board of Equalization at its actual value. In addition, paragraph 3 of section 14 provided that “no excise, or income tax or any other form of tax or license charge shall be levied or assessed upon or collected from the companies, or any of them, mentioned in the first paragraph of this section, in any manner or form, different from, or at a higher rate than that imposed upon or collected from mercantile, manufacturing and business corporations doing…