Amdahl Corp. v. County of Santa Clara

This appeal concerns a claim for refund of property taxes. Respondent, the County of Santa Clara (County), issued to appellant Amdahl Corporation (Amdahl) escape assessments covering a five-year span from 1993 through 1997. The property assessed involves a “pool” of spare parts used by Amdahl to service and repair its customers’ computer equipment under extended service contracts. The County and Amdahl reached agreement as to the value of the spare parts pool subject to the tax, and Amdahl paid the taxes and interest thereon, which amounted to approximately $837,000 and $242,000, respectively.

Amdahl brought this action under Revenue and Taxation Code section 5140 et seq., for refund of the property taxes paid. Amdahl claimed that the spare parts pool is exempt from taxation under section 219, which provides ' that no property taxes shall be assessed on “business inventories.”

Amdahl and the County filed cross-motions for summary judgment, based upon stipulated facts. The trial court granted the County’s motion, and judgment was entered in its favor. Amdahl appealed, asserting that the trial court erred, because, as a matter of law, the spare parts pool must be…