V. O. Motors, Inc., a Corporation v. California State Board of Equalization, Etc.

V. 0. Motors, Inc. (“VO”) appeals from the dismissal of its suit for declaratory and injunctive relief against the California State Board of Equalization (“the Board”). VO contends that neither 28 U.S.C. § 1341 nor the Eleventh Amendment bars its suit and that it has exhausted its administrative remedies.

VO filed a complaint against the Board alleging that the assessment of use taxes on automobiles that it had leased to the federal government (1) violated the intergovernmental immunity of the federal government from state taxation, (2) was an arbitrary and discriminatory tax against plaintiff, and (3) was the result of an erroneous construction of the Tax Code. In support of this contention it cited two prior decisions of the same District Court (Real, J.) holding that California sales taxes imposed upon lessors of tangible personal property to the United States violated the Federal Constitution. See United States of America v. California State Board of Equalization, 650 F.2d 1127 (9th Cir.), aff’d, - U.S. -, 102 S.Ct. 1744 , 72 L.Ed.2d 157 (1972); United States of America v. State Board of Equalization, No. 72-2568-R (Oct. 21, 1975), aff’d, 536 F.2d 294 (9th Cir. 1976).

VO…