Westinghouse Beverage Group, Inc. v. County of San Diego

In this case we hold a manufacturer and wholesaler of soft drink products, Westinghouse Beverage Group, Inc., doing business as Seven-Up Bottling Companies of Southern California (7-Up), may be assessed San Diego County property taxes on its reusable containers in the possession of its wholesale customers on the lien date, in which it supplies carbon dioxide (Oa) gas and those in which it transports the syrup which, when mixed with the CO2, becomes a carbonated beverage which in *1444 turn is retailed by 7-Up’s customers. For the following reasons, we conclude 7-Up’s stainless steel returnable containers are neither exempt from property tax by virtue of the business inventory exemption stated in Revenue and Taxation Code sections 129 and 219 1 nor as returnable “containers used to package soft drink beverages” which are assessable only to the person in possession on the taxable lien date pursuant to section 996, subdivisions (a) and (c).

Relevant Facts

7-Up sued the County of San Diego for return of property taxes assessed on containers of CO 2 and containers of syrup which were in the possession of its wholesale customers on the lien date. These containers are not sold…

Dissenting.—Section 996 governs taxes on containers, not soft drink beverages. Indeed, in enacting section 996, the Legislature specifically found:

Given the returnable nature of the container here, and in light of the trial court’s unchallenged finding that the CO 2 and syrup at issue have no function other than as parts of a potable whole, I do not believe the uniformity desired by the Legislature would be fostered by allowing a tax on 7-Up’s containers while exempting similar containers where the components have been premixed.

I would affirm the judgment.