City of Livermore v. Pacific Gas & Electric Co.

The issue presented here is the constitutionality of the City of Livermore’s business license tax as applied to respondent *1003 Pacific Gas and Electric Company (P.G. & E.). This appeal follows the granting of summary judgment on behalf of P.G. & E. declaring section 12.23.9 of the Livermore City Code as unconstitutional in contravention of article XIII, section 19 of the California Constitution.

Article XIII, section 19 of the California Constitution provides in pertinent part: “No ... tax or license charge may be imposed on [companies transmitting or selling gas or electricity] which differs from that imposed on mercantile, manufacturing, and other business corporations.” The Livermore City Ordinance which P.G. & E. contends runs afoul of this constitutional amendment is a part of the business license scheme of the city. Livermore imposes one of three types of taxes on all businesses located in the city: a gross receipts tax, a flat rate tax, and a gross expense tax. The flat rate tax applies to businesses without a fixed location, such as carnivals, and the gross expense tax is imposed on businesses having administrative headquarters inside Livermore which have…