Agnew v. State Bd. of Equalization
| Citation | 64 Cal.Rptr.2d 771,55 Cal.App.4th 1479 |
| Decision Date | 25 June 1997 |
| Docket Number | No. B101992,B101992 |
| Parties | Previously published at 55 Cal.App.4th 1479 55 Cal.App.4th 1479, 97 Cal. Daily Op. Serv. 5076, 97 Daily Journal D.A.R. 8101 Dan J. AGNEW, Plaintiff and Appellant, v. STATE BOARD OF EQUALIZATION, Defendant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Mandel & Norwood, S. Jerome Mandel and Lilly Lewis, Santa Monica, Santa Monica, for Plaintiff and Appellant.
Daniel E. Lungren, Attorney General, Carol H. Rehm, Supervising Deputy Attorney General and Felix E. Leatherwood, Deputy Attorney General, for Defendant and Respondent.
This case presents the question whether a taxpayer is required to pay the accrued interest on the tax deficiency, as well as the tax claimed due and owing, as a necessary precondition for review by the State Board of Equalization of a claim for refund of an alleged overpayment of sales or use tax.
In this case the taxpayer paid the amount of the sales and use tax claimed to be owed. He then filed an action in the superior court for a declaration neither the applicable constitutional nor statutory provisions expressly required the payment of anything other than the amount of tax claimed to be due as a necessary condition for Board review of a refund claim. The State Board of Equalization (Board) demurred to the taxpayer's complaint claiming the taxpayer had failed to exhaust his administrative remedies, and as a consequence, both the California Constitution and statutory law prohibited the filing of any legal or equitable action to review the claimed tax deficiency. The trial court sustained the demurrer without leave to amend and dismissed the action.
We conclude nothing in the constitutional nor statutory provisions requires payment of accrued interest on the tax deficiency--in addition to the tax--as a prerequisite to either review of a claim for refund by the Board, or as a prerequisite to filing an action in the superior court for a declaration of the legality of the Board's de facto policy of requiring payment of both tax and accrued interest as a prerequisite to taking action on a taxpayer's claim for refund. Accordingly, we reverse the judgment of dismissal and remand to the trial court with directions to overrule the demurrer.
Appellant, Dan J. Agnew, is a resident of the State of Washington. In 1984 Agnew purchased a 25 percent interest in a thoroughbred racehorse named Hail Bold King. In September 1991, Agnew received a statutory "notice of determination" from the Board of a use tax assessment on the purchase of his interest in Hail Bold King. In October 1991, Agnew filed a petition for redetermination of the assessment.
In April 1992, Agnew received another "notice of determination" with regard to assessment of a sales tax on the sale of syndicate shares of the thoroughbred racehorse Desert Wine. A few weeks later Agnew filed a petition for redetermination of the sales tax assessment for the Desert Wine syndicate sale.
In February 1994, both requests for redetermination were reviewed by the Board's appellate review section. Staff counsel for the Board issued their decision and recommendation in August 1994, confirming the propriety of the tax assessments. In June 1995, Agnew sought a hearing before the Board. On September 7, 1995, the Board issued a statutory "notice of redetermination" and assessed $48,000 in use tax and $64,313.42 in accrued interest for the Hail Bold King transaction.
Later in September 1995, Agnew paid the amount of tax claimed due and owing on the Hail Bold King transaction--as well as the accrued interest--and filed a claim for refund of overpayment of use tax with the Board. 1
Also in September 1995, the Board issued its "notice of redetermination" of unpaid sales taxes in the Desert Wine transaction. The Board assessed $516,750 as due and owing in sales tax plus $708,648.86 in accrued interest through September 30, 1995.
On October 6, 1995, Agnew paid the full amount of the tax claimed due and owing on the Desert Wine transaction. He did not, however, pay the interest which had accrued on the tax deficiency. Agnew then filed a claim for refund for overpayment of sales tax with the Board. 2
In November 1995, Agnew filed a first amended complaint for declaratory relief. Agnew's complaint sought a declaration barring the Board from requiring payment of accrued interest on a sales or use tax determination--in addition to the tax--prior to acting on a taxpayer's claim for a refund of sales or use taxes. Agnew's complaint alleged the Board's policy of requiring the payment of interest in addition to the tax prior to filing a claim for refund was in contravention of the sales and use tax law and the California Constitution.
The Board demurred to the complaint. The Board claimed the facts alleged in the complaint failed to state a cause of action because (1) article XIII, section 32 of the California Constitution and section 6931 of the Revenue and Taxation Code preclude any legal or equitable action to prevent or enjoin the collection of sales and use tax; and because (2) Agnew had failed to exhaust administrative remedies prescribed by the Revenue and Taxation Code prior to filing a lawsuit concerning a tax matter.
Agnew opposed the demurrer. He claimed neither the constitutional nor statutory provision was a bar to a declaratory relief action because the lawsuit did not impede or prevent the collection of taxes. He had already paid the tax assessments. He pointed out his lawsuit was instead directed at the Board's unwritten policy of requiring payment of both taxes and accrued interest prior to reviewing claims for refund and sought a declaration the policy was not authorized by the California Constitution nor the Revenue and Taxation Code.
The trial court sustained the Board's demurrer without leave to amend and dismissed the action. Agnew appeals from the judgment of dismissal.
I. STANDARD OF REVIEW.
..." (City of Chula Vista v. County of San Diego (1994) 23 Cal.App.4th 1713, 1718-1719, 29 Cal.Rptr.2d 89.)
In construing statutes, we must determine and effectuate legislative intent, looking first to the words of the statutes, and giving them their usual and ordinary meaning. (Lennane v. Franchise Tax Bd. (1994) 9 Cal.4th 263, 268, 36 Cal.Rptr.2d 563, 885 P.2d 976.) If there is no ambiguity in the language of the statute, the Legislature is presumed to have meant what it said, and the plain meaning of the language governs. Courts will not interpret away clear language in favor of an ambiguity which does not exist. (Ibid.)
Significance should be attributed to every word and phrase of a statute, and a construction which makes some words surplusage should be avoided. (Seidler v. Municipal Court (1993) 12 Cal.App.4th 1229, 1234, 16 Cal.Rptr.2d 90.) Nor is a court authorized to insert qualifying provisions and exceptions which have not been expressly included by the Legislature. In addition, a court may not rewrite a statute to conform to an intention which does not appear in the statutory language. (California Real Estate Loans, Inc. v. Wallace (1993) 18 Cal.App.4th 1575, 1582, 23 Cal.Rptr.2d 462.)
(Edison California Stores v. McColgan (1947) 30 Cal.2d 472, 476, 183 P.2d 16; see also Dreyer's Grand Ice Cream, Inc. v. County of Alameda (1986) 178 Cal.App.3d 1174, 1182, 224 Cal.Rptr. 285 [].)
We review the issues raised in this appeal with these standards in mind.
II. IT WAS NOT NECESSARY TO EXHAUST ADMINISTRATIVE REMEDIES BEFORE SEEKING A JUDICIAL DETERMINATION OF THE VALIDITY OF THE BOARD'S DE FACTO POLICY OF REQUIRING PAYMENT OF BOTH THE TAX CLAIMED DUE AND OWING AS WELL AS THE ACCRUED INTEREST ON THAT AMOUNT PRIOR TO GRANTING ADMINISTRATIVE REVIEW.
California's sales and use tax law (Rev. & Tax Code, §§ 6001, et seq.) 3 embodies a comprehensive tax system to impose an excise tax on the sale, use, storage or consumption of tangible personal property within the state. (§ 6201.) ...
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