Lykes Bros. Steamship Co. v. State Board of Equalization

On July 5, 1989, plaintiff Lykes Bros. Steamship Co., Inc. (Lykes), filed this action against the State Board of Equalization (Board), to recover $32,076 in sales and use taxes paid under protest, plus interest thereon from date of payment. Trial was by the court, sitting without a jury. Following Lykes’s presentation of evidence, the Board filed a motion for judgment pursuant to Code of Civil Procedure section 631.8. The motion was granted and Lykes appeals. We affirm.

I

Before addressing the issues at hand, some background information is in order. Lykes is a steamship company with worldwide common carrier operations. Fuel purchased in California by Lykes and other common carriers in conjunction with their business of interstate and/or international transportation, is subject to limited taxation by the State of California. Fuel used by a common carrier to reach its first out-of-state destination is subject to the state sales tax; the remainder, used for transportation elsewhere, is exempt. To qualify for this exemption, carriers must submit to their fuel vendors a bill of lading and an exemption certificate stating the quantity of fuel and petroleum products claimed as…