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Business Taxes Law Guide—Revision 2024

Sales And Use Tax Court Decisions


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Kuykendall v. State Board of Equalization … (1994)


Statutory Procedure for Refund of Unconstitutionally Imposed Sales Tax Is Valid

Plaintiff commenced a class action against defendants State Board of Equalization and San Diego County Regional Justice Facility seeking a refund of sales taxes in the wake of a decision by the California Supreme Court declaring a local sales tax in San Diego as unconstitutional. Following the Court’s decision, the Board announced a plan for refund claims to be made through the San Diego retailers who had transferred the Jail Tax moneys to the Board. Plaintiffs commenced the consumer class action for refund, seeking direct reimbursement of the Jail Tax moneys to the consumers who effectively paid the tax. The trial court granted plaintiffs’ summary judgment finding that they the taxpayers, and ordered defendants to submit a plan to refund the taxes; however, during the pendency of the litigation, the legislature enacted California Revenue and Taxation Code section 7275 et seq. (SB 263), which, by its terms, constituted the sole manner of obtaining refunds.

The appellate court found that the trial court's judgment created no vested rights and that the legislature clearly intended the statutory scheme to apply to the pending litigation. The court of appeal further found that article XIII, §32, of the California Constitution, gave the legislature plenary power to create the refund scheme through statute and that the statute was not unconstitutional although it created different classes of taxpayers and although its ends might have been achieved through different means. Kuykendall v. State Board of Equalization (1994) 22 Cal.App.4th 1194.