California Court of Appeal

In a retirement home's suit against the Franchise Tax Board (FTB) for the refund of California tax and penalties, trial court's judgment dismissing plaintiff's cause of action for a refund of taxes based on the section 24402 dividends received deduction, following the sustaining of the FTB's demurrer without leave to amend and grant of summary judgment in favor of the FTB on plaintiff's cause of action for refund of the amnesty penalties are affirmed where: 1) section 24402 cannot be saved by severance of the offending language or by reformation; 2) FTB proceeded with proper authority to remedy the commerce clause violation infecting section 24402; 3) the remedy of disallowing the dividends received deductions for the years at issue did not violate due process prohibition against excessively retroactive tax increases; 4) FTB's decision to recoup the deductions for the years at issue did not run afoul of article XIII A, section 3 of the California Constitution; and 5) the deficiency assessments for tax years 1999 and 2000 were "due and payable" within the meaning of section 19777.5; 6) section 19777.5 does not violate due process because it does not operate retroactively; and 7) there is no statute of limitations bar to imposing the amnesty penalty for the 1999 tax year.

Appellate Information

• Decided 07/15/2010
• Published 07/15/2010

Judges

• Reardon, J.

Court

• California Court of Appeal

Counsel

• For Appellant:
  
• Amy L. Silverstein, Edmund G. Brown, Jr.