Alan Van Vliet Enterprises, Inc. v. State Board of Equalization

Plaintiff Alan Van Vliet Enterprises, Inc., doing business as American Coin Company, persuaded the trial court that a regulation of defendant California State Board of Equalization (Cal. Admin. Code, tit. 18, reg. 1599) too narrowly defines the transactions which qualify for the statutory exemption from sales and use taxes for commodity transactions in gold and other metal coins. (Rev. & Tax. Code, § 6355.) The board appeals the judgment.

The first subdivision of section 6355 states the tax exemption: “(a) There are exempted from the taxes imposed by this part the gross receipts from the sales in bulk of monetized bullion which are substantially equivalent to transactions in securities or commodities through a national securities or commodities exchange and the storage, use or other consumption in this state of monetized bullion so sold.” In other words, while an ordinary sale of rare coins to a numismatist may be taxable, a bulk sale of coins to an investor interested in the coins for the value of their metallic content should be treated as any other commodity transaction, exempt from sales and use taxes.

The subsequent subdivisions amplify the meaning of the first:…