Pacific Pipeline Construction Co. v. State Board of Equalization

Defendant appeals from a judgment entered in favor of plaintiff in an action for a refund of certain sales taxes, interest and penalties paid under protest, after trial before the court without a jury.

Although other issues were tried in the action, the sole question presented on this appeal is whether plaintiff is required to pay a sales tax with respect to a certain transfer to Pacific Pipeline & Engineers, Ltd., by plaintiff on March 14, 1949, of machinery and equipment valued at $201,230.50. *731 Defendant determined that plaintiff was required to pay a tax of $6,491.78.

Prior to February 24, 1949, plaintiff and Engineers, Ltd., jointly owned Pacific Pipeline & Engineers, Ltd., which was engaged in the pipeline construction business. On February 24, 1949, an agreement was entered into by the three corporations and certain individuals providing for a reorganization of Pacific Pipeline & Engineers, Ltd., and plaintiff and for a territorial division of the pipeline business. On March 12, 1949, plaintiff entered into an agreement with Pacific Pipeline & Engineers, Ltd., providing for the exchange of certain properties to carry out the agreement of February 24th, and on March 14,…

Dissenting.—The trial court, from a wealth of oral and documentary evidence showing the transactions involved and the relationships of the parties, both contractual and territorial, and including stock ownership, presumptively resolved all conflicts and drew all permissible inferences in favor of plaintiff. Among other things, it expressly found that “said transfer of property [on which the disputed tax is based], as provided for in . . . [the] exchange agreement, was not a sale of property at retail such as is contemplated by and referred to in Section 6051 of the Revenue and Taxation Code, but was an occasional sale within the meaning of that term as used in Sections 6367 and 6006.5 of the Revenue and Taxation Code, and as contemplated by the pertinent law of California.” Certainly, a transfer of property was involved but equally certain is the fact that it was not any ordinary retail sale. Specifically, the trial court found that the subject agreement effected “a reorganization of the Pacific Pipeline and Engineers, Ltd., and of the plaintiff and for a territorial division of ‘pipeline business’ between said corporations” and that the transfer involved was made to carry out…

Defendant appeals from a judgment entered in favor of plaintiff in an action for a refund of certain sales taxes, interest and penalties paid under protest, after trial before the court without a jury.

Although other issues were tried in the action, the sole question presented on this appeal is whether plaintiff is required to pay a sales tax with respect to a certain transfer to Pacific Pipeline & Engineers, Ltd., by plaintiff on March 14, 1949, of machinery and equipment valued at $201,230.50. Defendant determined that plaintiff was required to pay a tax of $6,491.78.

Prior to February 24, 1949, plaintiff and Engineers, Ltd., jointly owned Pacific Pipeline & Engineers, Ltd., which was engaged in the pipeline construction business. On February 24, 1949, an agreement was entered into by the three corporations and certain individuals providing for a reorganization of Pacific Pipeline & Engineers, Ltd., and plaintiff and for a territorial division of the pipeline business. On March 12, 1949, plaintiff entered into an agreement with Pacific Pipeline & Engineers, Ltd., providing for the exchange of certain properties to carry out the agreement of February 24th, and on…