TRW Space & Defense Sector v. County of Los Angeles

Introduction

TRW Space and Defense Sector, a unit of TRW, Inc., and TRW Components International, Inc. (collectively, TRW), brought an action to recover ad valorem personal property taxes assessed and collected by the County of Los Angeles (County) for the tax years 1986 through 1989. The parties filed cross-motions for summary judgment. The trial court granted TRW’s motion and denied County’s motion. County appeals from the judgment awarding TRW a refund in excess of $2.1 million.

The primary issues presented by this appeal are County’s power to tax a federal contractor such as TRW and whether the personal property which was the subject of County’s assessment was the property of TRW or the property of the United States of America. If it is the latter, the property is immune from taxation. A minor issue raised by County is whether TRW should have exhausted its administrative remedies before the Los Angeles County Assessment Appeals Board before filing its tax refund suit in the superior court.

We reverse. We find that the property is properly subject to local taxation because it belongs to TRW, not the federal government. We also find that TRW was not required to first…