Air China Ltd. v. County of San Mateo

Air China Limited appeals from a summary judgment entered in favor of San Mateo County (the County) finding that the County’s assessment and collection of taxes on Air China’s leasehold possessory interests and landing rights at the San Francisco International Airport (Airport) pursuant to California Revenue and Taxation Code sections 107 and 107.9 were proper. Air China contends that a tax treaty between the United States and the People’s Republic of China (PRC) prohibits the County from imposing taxes on its operations at the Airport, and that the taxes are contrary to the United States Internal Revenue Code and to the Convention on International Civil Aviation, December 7, 1944 ( 61 Stat. 1180 , 1189) (the Chicago Convention). We affirm.

I. FACTUAL BACKGROUND

The parties stipulated to the following facts: Air China is a corporation organized and existing under the laws of the PRC and is engaged exclusively in international air transportation serving various cities throughout the world including San Francisco. Air China operates aircraft out of the Airport and leases space there that it uses exclusively for its air transportation operations.

The United States and the…