Framingham Acceptance Corp. v. State Board of Equalization

Following an adverse determination by the State Board of Equalization (respondent or the Board), the Framingham Acceptance Corporation (appellant) brought an action under Revenue and Taxation Code 1 section 6933 to recover sales taxes paid under protest. The case went to trial on stipulated facts which are as follows: appellant leased equipment that it had purchased “tax paid” (§ 6006, subd. (g)(5)) to a customer (hereafter Buyer) for a term of 84 months with payments set at $1,810 per month. Simultaneously, it executed an agreement allowing Buyer to purchase *463 the equipment for $9,000 “ ‘after completion of the rental payments under the lease.’ ” Buyer decided it wanted the equipment after 52 months (in Mar. 1980) so appellant sold it for the originally agreed price of $9,000 plus “$48,532.00 consisting of the unpaid rental receipts balance of $56,110.00 less an unearned finance charge of $7,578.00.” The Board determined that sales tax was due on the entire $57,532 paid by Buyer rather than on only the first $9,000, as argued by appellant.

The trial court found “that the amount paid [after 52 months] for the transfer of title in question did not constitute lease…