California Court of Appeal

In a taxpayer's action for a refund, challenging the constitutionality of Revenue and Taxation Code provisions allowing an individual California taxpayer to defer capital gains on the sale of stock in a qualified small business if the taxpayer used the gain to purchase stock in another qualified small business, the judgment of the trial court is reversed, as because the statute affords taxpayers a deferral for income received from the sale of stock in corporations maintaining assets and payroll in California, while no deferral is afforded for income from the sale of stock in corporations that maintain assets and payroll elsewhere, the deferral provision discriminates on its face on the basis of an interstate element in violation of the commerce clause.

Appellate Information

• Decided 08/28/2012
• Published 08/28/2012

Judges

• Grimes

Court

• California Court of Appeal

Counsel