California Court of Appeal

In a taxpayers' group's suit against the state Franchise Tax Board, claiming that section 19138, of the Revenue and Taxation Code, is unconstitutional under article XIII A, section 3, for not meeting a legislative vote requirement and is also unconstitutional on procedural grounds, trial court's judgment in favor of the Franchise Tax Board is affirmed where: 1) the Revenue and Taxation Code section 19138, a corporate tax penalty provision for understating such taxes by more than $1,000,000, is a penalty, and therefore, not subject to the two-thirds legislative vote requirement for a "state tax" increase as required by article XIII A, section 3 of the state Constitution; and 2) the statute, as properly construed, affords due process.

Appellate Information

• Decided 12/13/2010
• Published 12/13/2010

Judges

• BUTZ

Court

• California Court of Appeal

Counsel

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