Ilko v. California State Board of Equalization (In Re Ilko), 651 F.3d 1049

Daniel Ilko, as president and shareholder of Executive Auto Sales, Inc. (EAS), was the
debtor in a chapter 7 case; EAS owed California sales taxes under Cal. Rev. & Tax Code §6051.
A final assessment of $85,376.58 against EAS was issued, with some payments made prior to bankruptcy.
After discharge in 2001, EAS ceased operations in 2003 without paying the full tax amount.
In 2005, the California Board of Equalization issued a dual determination holding Ilko personally liable under §6829 for unpaid EAS taxes.
The Board argued the liability could be pursued post-petition and was nondischargeable; Ilko sought to have the debt discharged.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is Ilko’s §6829 liability a "tax" under §523(a)(1)?	Ilko argues it is not a tax; the Board contends it is a tax.	Board contends §6829 liability falls within the nondischargeable tax category.	Yes; Ilko's liability is a dischargeable tax under §523(a)(1).
If a tax, is Ilko’s liability 'of the kind' specified in §507(a)(8)?	Board asserts it falls under §507(a)(8)(A) as a tax on or measured by gross receipts.	Ilko argues the Raiman approach is incorrect and that the tax may not be gross receipts-based.	Yes; the tax falls within §507(a)(8)(A) as a gross receipts-based tax.
Is the California sales tax an excise tax under §507(a)(8)(E) or governed by §507(a)(8)(A)?	Board contends it is an excise tax; potential safe harbor under §507(a)(8)(E).	Ilko argues the tax is covered by §507(a)(8)(A) and §507(a)(8)(E) does not override.	The tax may be viewed as an excise tax, but §507(a)(8)(A) governs here; it is not saved by §507(a)(8)(E).
Did the tax liability become assessable after the petition was filed, affecting §507(a)(8)(A)(iii)?	Board argues assessment occurred after dissolution, so post-petition assessability applies.	Ilko contends assessment did not occur pre-petition and thus should be discharged.	The liability did not become assessable post-petition in a manner that defeats discharge.

Lorber Indus. of Cal. v. County Sanitation Dist., 675 F.2d 1062 (9th Cir. 1982) (defines the four-part test for what constitutes a 'tax')
United States v. Sotelo, 436 U.S. 268 (1984) (personal liability analogous to a tax; funds remain taxes)
In re George, 95 B.R. 718 (9th Cir. BAP 1989) (adopts Lorber test for 'tax' under §523)
George v. Uninsured Employers Fund (In re George), 361 F.3d 1157 (9th Cir. 2004) (adds fifth consideration about government claims and private creditors)
In re Raiman, 172 B.R. 933 (9th Cir. BAP 1994) (held California sales tax is a tax on or measured by gross receipts)
In re Shank, 792 F.2d 829 (9th Cir. 1986) (examines whether sales taxes can fall under excise vs. other categories)
State Bd. of Equalization v. Wirick, 93 Cal. App. 4th 411 (Cal. Ct. App. 2001) (limits personal liability to termination/dissolution of the corporation)