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City of San Jose v. Ruthrford

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Unconstitutional Multiple Taxation

Filed under: — site admin @ 7:47 pm

City of San Jose v. Ruthroff, Englekirk, Etc. Engineers, Inc. 1 Cal.App.3d 462; 183 Cal.Rptr. 391

I'm sorry about the highlighted colors, but I found the following short summary of the California Court of Appeal decision on the Multiple Taxation case. You may wish to keep a copy of this in your Cybrary (what I call my electronic library) to help you in case the issue comes up in a city you are doing business in. For those who receive this in ASCII with all the format information, my apologies.

Dennis S. Wish, PE

[Civ. No. 48964, First Dist., Div. One. May 6, 1982.]
CITY OF, SAN JOSE, Plaintiff and Respondent, v. RUTHROFF & ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC., Defendant and Appellant.

The trial court held that a minimum annual city business license tax was properly levied upon a firm of consulting engineers which had all of its offices outside the levying city and whose employees had spent a total of about 12 hours during the taxable year working in the city. The case was certified for transfer to the Court of Appeal to secure uniformity of decision and to settle an important question of law. (Superior Court of Santa Clara County, No. 431438, (Robert P. Aguilar, Judge.)

The Court of Appeal reversed, holding that the tax was improperly levied. The court held that the amount of the tax in such situations was of little, if any, significance and that such taxes tend to encourage unconstitutional multiple burdens of taxation on those engaged in intercity business within the state. The court also held that, even taking into the consideration the practical cost problems often attending apportionment and collection of business license taxes where the proportion of the taxed activity actually taking place within the taxing jurisdiction is small, it is reasonable to treat the matter as de minimis, rather than to unfairly discriminate against intercity businesses by subjecting them to a measure of taxation which is not fairly apportioned to the quantum of business actually done in the taxing jurisdiction. (Opinion by Elkington, J., with Racanelli, P. J., and Newsom, J., concurring.)


Classified to California Digest of Official Reports, 3d Series
(1) Business and Occupational Licenses § 3-Territorial Limitations -Minimum Annual Business License Tax. – A city minimum an

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