926 NORTH ARDMORE AVENUE, LLC, Plaintiff and Appellant, v. COUNTY OF LOS ANGELES, Defendant and Respondent.
S222329
IN THE SUPREME COURT OF CALIFORNIA
Filed 6/29/17
Ct.App. 2/7 B248356; Los Angeles County Super. Ct. No. BC476670
SEE DISSENTING
Here we consider whether the County of Los Angeles can impose a documentary transfer tax on a written instrument that transfers beneficial ownership of real property from one person to
I. FACTS AND PROCEDURE
This case arises from a series of transactions among trusts maintained for the benefit of Averbook family members. Beryl and Gloria Averbook owned
In their roles as successor trustees, Bruce and Allen formed two entities: 926 North Ardmore Avenue, LLC (LLC), a single-member limited liability company established to acquire and hold the Building; and BA Realty, LLLP (BA Realty), a partnership. The administrative trust was the sole member of LLC. It also held a 99 percent partnership interest in BA Realty.1
Between August and December 2008, the administrative trust engaged in the following transactions. First, it conveyed the Building by grant deed to LLC. Second, it transferred its membership interest in LLC to BA Realty. Third, it divided its 99 percent interest in BA Realty and distributed it to four subtrusts also maintained for Gloria‘s benefit. The survivor‘s trust received 64.66 percent; the nonexempt marital trust 23.86 percent; the exempt marital trust 0.67 percent; and the bypass trust 9.81 percent.
The net result of these transactions did not alter one central reality. When Beryl and Gloria transferred the Building from themselves personally into the family trust, they retained a beneficial interest. The trust became the legal owner, but it was obligated to hold and manage the Building for their benefit. After Beryl‘s death, Gloria held the sole beneficial interest. The subsequent transactions described in the preceding paragraph moved the Building‘s legal ownership among the various entities. But Gloria‘s beneficial interest remained unchanged.
In January 2009, a different kind of transaction triggered imposition of the documentary transfer tax. The survivor‘s trust, the nonexempt marital trust, and the marital trust transferred all of their interests in BA Realty to two trusts maintained for Allen and Bruce. Allen and Bruce were each the sole beneficiary of their named trust. (These trusts will be referred to as the Allen and Bruce Trusts.) As a result, Allen and Bruce each acquired a beneficial interest in the Building they had not held before.
The 2009 transfers were effectuated by written instruments, including six limited partner transfer and substitution agreements. The transaction did not involve the execution of a deed or other instrument transferring title to the
B. Change in Ownership and Property Tax Assessment
As required by
Under California‘s property tax laws, a ―change in ownership‖ of real property occurs when there is ―a transfer of a present interest in real property, including the beneficial use thereof, the value of which is substantially equal to the value of the fee interest.‖ (
Generally, the transfer of an interest in a legal entity does not result in a change in ownership of the entity‘s real property. (
That is what happened here. The transfer of the Building, in August 2008, from the administrative trust to LLC, was not a change in ownership under
C. Documentary Transfer Tax Assessment and Refund Claim
In August 2011, LLC received a notice from the Los Angeles County registrar-recorder (Recorder) demanding payment of the county‘s documentary transfer tax. This tax is different from the property tax assessment.
The Recorder explained the transfer tax was due because the Building had undergone a change in ownership. LLC paid the amount demanded and filed a claim for refund. LLC argued the documentary transfer tax is a levy on written instruments that transfer ownership of real property, not on written instruments that transfer legal entity interests.7 In the alternative, LLC argued no tax was due because (1) BA Realty, the entity transferred, did not hold
When LLC then filed this refund action, the trial court denied the claim. LLC appealed, and the Court of Appeal affirmed, holding a county may impose its documentary transfer tax whenever a transfer of legal entity interests results in a change in ownership under
II. DISCUSSION
The issue is whether the county was authorized, under
Accordingly, our primary task is to ―ascertain the intent of the Legislature so as to effectuate the purpose of the law.‖ (Alford v. Superior Court (2003) 29 Cal.4th 1033, 1040.) The Legislature‘s language is the best indicator of its intent. (Adoption of Kelsey S. (1992) 1 Cal.4th 816, 826.) The words of the statute ―must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must, to the extent possible, be harmonized.‖ (Long Beach Police Officers Assn. v. City of Long Beach (1988) 46 Cal.3d 736, 746.) If the statutory language is not clear, a court may resort to extrinsic sources, like legislative history. (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 531.) As to tax statutes, courts ―may not extend their provisions, by implication, beyond the clear import of the language used,‖ and a statute whose language is unclear should be construed to favor the taxpayer. (Edison California Stores v. McColgan (1947) 30 Cal.2d 472, 476.) That said, though taxpayers ―may adopt any lawful means for the lessening of the burden of taxes . . . upon properties or profits,‖ the Legislature may enact measures to prevent avoidance of taxes properly imposed. (Ibid.)
In a tax refund action, the burden of proof is on the taxpayer, who must demonstrate the assessment is incorrect and produce evidence to establish the proper amount of the tax. (Dicon Fiberoptics, Inc. v. Franchise Tax Bd. (2012) 53 Cal.4th 1227, 1235.) Here, LLC does not claim it owes a different amount of tax. Instead, it challenges the county‘s authority to tax this transaction at all.
LLC argues the tax authorized by
Relying on
We begin with the text of
This ambiguity is eliminated, however, if we consider
The federal stamp act had a similar exemption. Neither the federal real property conveyance tax nor the federal corporate stock transfer tax would be imposed by reason of any transfer of an interest in a partnership, if the partnership did not terminate and continued to hold the realty or stock. (26 U.S.C. former § 4383(a) (1964).) If the partnership terminated, it would be treated as if it transferred all of its shares and executed a document transferring all of its realty. (26 U.S.C. former § 4383(b)(1) (1964).) The existence of this exemption shows that the stamp act‘s real property conveyance tax could have been triggered by the transfer of interests in a legal entity. If a legal entity transfer could not have triggered that tax, it would have been unnecessary to exempt transfers of nonterminating partnerships from its scope.11
The federal stamp act‘s treatment was carried forward by
documents showing that number are subject to the tax. That construction would be absurd, as it would permit parties to evade imposition of the tax by omitting that number from an otherwise taxable document.
Thus, we conclude a written instrument conveying an interest in a legal entity that owns real property may be taxable, even if the instrument does not directly reference the real property and is not recorded.14
In assessing the transfer tax against LLC, the Recorder relied on the Assessor‘s determination the Building had changed ownership for property tax purposes. A Recorder‘s office employee testified that this practice began in 2010. Before 2010, the Recorder routinely collected the transfer tax on deeds and other instruments submitted for recording, but generally did not collect the tax on unrecorded real property transfers unless a taxpayer voluntarily reported and paid the tax. (See ante, p. 13, fn. 14.) The reason for this, according to the employee, was that the Recorder did not have access to the information contained in the change in ownership statements filed with the Board of Equalization.15 (See ante, at p. 3, fn. 4.) In 2009, the Legislature amended
LLC argues the Recorder‘s reliance on property tax rules was misplaced. It urges the Legislature cannot have intended the change in ownership rules to apply in implementing the Transfer Tax Act because those rules were enacted more than a decade later and are found in a different division of the Revenue and Taxation Code. Instead, the county should have relied on federal authorities construing the stamp act, none of which held the federal tax could be triggered by the transfer of a legal entity. Rather, they stood for the proposition the tax only applied to written instruments directly referencing and transferring real property.
The trial court entered judgment against the county and the Court of Appeal affirmed. While there was no federal authority directly on point, the Thrifty court noted that a lease was subject to the federal tax if it conveyed a bundle of rights approximating the rights associated with a fee simple interest. (Thrifty, supra, 210 Cal.App.3d at pp. 884-885.) The court thus reasoned that the critical question was whether, under state law, the lease term was sufficiently long to ―approximate an ‗ ―ownership‖ ‘ right rather than a mere ‗temporary right of possession.‘ ‖ (Id. at p. 885.) To make that determination, the court looked to California‘s property tax laws, specifically,
We adopt a similar approach here. The parties have not cited, and our research has not revealed, any federal authority addressing the stamp act‘s application to a transaction exactly like this one. That is understandable. When the stamp act was in effect, limited liability companies did not exist and tax laws created disincentives for small businesses to take the corporate form. (Hamill, The Origins Behind the Limited Liability Company (1998) 59
LLC particularly relies on United States v. Seattle Bank (1944) 321 U.S. 583 (Seattle Bank). There, the Court considered whether the federal tax applied to the transfer of real property resulting from a statutory consolidation of a national bank and a state bank. (Id. at p. 585.) The consolidation agreement provided that all of the state bank‘s assets, including its real estate, would ― ‗pass to and vest in the consolidated association.‘ ‖ (Ibid.) That transfer, however, ―was not evidenced by any deed, conveyance, assignment or other instrument.‖ (Ibid.)
The transfer was held not taxable. (Seattle Bank, supra, 321 U.S. at pp. 589-590.) The Court reasoned: ―It is clear . . . from § 3 of the National Banking Act that the state bank‘s realty was not conveyed to or vested in respondent by means of any deed, instrument or writing. There was a complete absence of any of the formal instruments or writings upon which the stamp tax is laid. Nor can the realty be said to have been ‗sold‘ or vested in a ‗purchaser or purchasers‘ within the ordinary meanings of those terms. Only by straining the realities of the statutory consolidation process can [the consolidated association] be said to have ‗bought‘ or ‗purchased‘ the real property.‖ (Id. at p. 590.)
Relying on Seattle Bank, LLC contends the federal tax applied only if there were formal instruments directly referencing the real property transferred. But the Supreme Court did not stop after noting the absence of such documents; instead, it held no tax was due because the substance of the transfer did not involve the purchase or sale of property.17 (See also Berry v. Kavanagh (6th Cir. 1943) 137 F.2d 574, 576 [―[i]f Congress had intended to levy a tax on every transfer of title it could have expressed its purpose in a sentence, but it is clear from the language of the section that it intended to confine the tax to actual sales‖].)
In determining whether the substance of a transaction warranted imposition of the tax, federal courts often focused on whether there was a change in beneficial ownership of the real property. For example, in Carpenter v. White (1st Cir. 1935) 80 F.2d 145 (Carpenter), two business trusts, the Amoskeag
The First Circuit Court of Appeals upheld the imposition of the tax. The court acknowledged ―that mere rearrangement of the title to property . . . , without real change of ownership, is not a taxable conveyance.‖ (Carpenter, supra, 80 F.2d at p. 146.) But it found this transaction was not a mere rearrangement of title. (Ibid.) Instead, there was ―a complete change in both the legal title and the beneficial ownership of the property, not a continuance of the same beneficial ownership in the hands of new trustees.‖ (Ibid.) Moreover, the court found that ―the equitable interests of the new shares‖ were not ―in the same property as those of the old shares; the latter represented interests only in the property of the Amoskeag Company; the former, interests in all the property conveyed to the new trust.‖ (Ibid.) Based on those findings, the court concluded the federal stamp tax applied to the transfer. (Id. at p. 147.)
Under Carpenter, it is clear that if a transaction resulted in the transfer of beneficial ownership of real property for consideration it was subject to the federal real property transfer tax. When a transaction did not result in the transfer of beneficial ownership, however, the federal authorities were less clear. In Socony-Vacuum Oil Co. v. Sheehan (E.D.Mo. 1943) 50 F.Supp. 1010, R.H. Macy & Co. v. U.S. (S.D.N.Y. 1952) 107 F.Supp. 883, and Greyhound Corp. v. U.S. (7th Cir. 1954) 208 F.2d 858, the federal courts confronted cases in which parent companies dissolved their wholly owned subsidiaries and the subsidiaries transferred real property to the parent companies. (Socony, at p. 1011; R.H. Macy, at pp. 883-884; Greyhound, at p. 859.) Though none of the real property transfers resulted in a change in beneficial ownership, the cases reached different results. In Socony, the court held no tax was due because the parent, ―as the owner of all the capital stock of the . . . subsidiary corporations . . ., was the equitable owner of all the real estate and other assets of each of [the] subsidiaries before the deeds in question were given.‖ (Socony, at p. 1012.) The deeds were given ―to show the transfer of legal title only.‖ (Ibid.; see also U.S. v. Niagara Hudson Power Corporation (S.D. N.Y. 1944) 53 F.Supp. 796, 801 [―a mere transfer or change of legal title is not a taxable transaction‖].) In R.H. Macy and Greyhound, on the other hand, the courts
As to this second category of transactions, in which beneficial ownership is not transferred, the California Legislature has provided clarity where the federal case law did not. In 1999, the Legislature added
Combining all of these principles, we conclude that the critical factor in determining whether the documentary transfer tax may be imposed is whether there was a sale that resulted in a transfer of beneficial ownership of real property. The change in ownership rules, though enacted after the Transfer Tax Act, fit squarely into this framework. The federal stamp tax applied to written instruments that transferred a ― ‗bundle of rights‘ ‖ approximating an estate in fee simple. (See Texaco, Inc. v. U.S. (5th Cir. 1980) 624 F.2d 20, 21.) The triggering event for reappraisal under California‘s property tax laws is a ―transfer of a present interest in real property, including the beneficial use thereof, the value of which is substantially equal to the value of the fee interest.‖ (
Thus,
Gloria‘s subtrusts for the interests they acquired in the Building. This payment was consideration for the sale.
Under LLC‘s construction of the statute, if A executed a deed transferring real property to B, that deed would be taxable. But if A created a limited liability company, executed a deed transferring real property to that company, and then executed a written instrument transferring the company to B, the tax would not apply. That approach would elevate form over substance, and conflict with the purposes of the Transfer Tax Act. Subject to the qualifications set forth above and to the exemption set forth in
III. DISPOSITION
The Court of Appeal correctly rejected plaintiff‘s refund claim. The transfer of a beneficial interest in the Building to the Allen and Bruce Trusts was a sale, accompanied by consideration and effected by a document of transfer. The judgment of the Court of Appeal is affirmed.
CORRIGAN, J.
WE CONCUR:
CANTIL-SAKAUYE, C. J.
WERDEGAR, J.
CHIN, J.
LIU, J.
CUÉLLAR, J.
926 North Ardmore Avenue, LLC v. County of Los Angeles
KRUGER, J.
DISSENTING OPINION BY KRUGER, J.
The Documentary Transfer Tax Act (DTTA;
I.
Although the DTTA has been on the books in California only since 1967, documentary transfer taxes have a much longer pedigree. Congress passed a tax requiring the affixing of documentary stamps to instruments conveying ―realty sold‖ as early as 1862. (Revenue Act of July 1, 1862, ch. 119, schedule B, 12 Stat. 481.) Congress reenacted this tax several times over the ensuing decades, along with stamp taxes on, among many other things, transfers of stocks and bonds. (See, e.g., Act of June 13, 1898, ch. 448, § 6 & schedule A, 30 Stat. 451, 458, 460;
California picked up the mantle following the federal repeal, enacting a statute — the DTTA — that mirrored the federal stamp tax on instruments conveying realty, but did not incorporate the stamp taxes on transfers of stocks and bonds. (Stats. 1967, ch. 1332, p. 3162.) The enrolled bill memorandum reflects a legislative intent to ―conform to the existing federal tax on transfers of real property.‖ (Enrolled Bill Mem. on Sen. Bill No. 837 (1967 Reg. Sess.) Aug. 18, 1967, p. 1; maj. opn., ante, at p. 8, fn. 8 [quoting].) The resulting statute permits a county to ―impose, on each deed, instrument, or writing by which any lands, tenements, or other realty sold within the county shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his or their direction, when the consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrance remaining thereon at the time of sale) exceeds one hundred dollars
Whether, and under what circumstances, an entity interest transfer falls within the DTTA‘s scope is a question of statutory interpretation. By its terms, the tax authorized by the DTTA applies to ―deed[s]‖ or other ―writing[s]‖ by which land or other real property is conveyed for value. (
In finding that the DTTA encompasses entity interest transfers — unambiguously so, even — the majority relies on
In any event, it is not true that
II.
To acknowledge that the DTTA applies only to deeds and other documents by which real property is sold is not to say that the documentary transfer tax could never be imposed because of a transfer of interests in a legal entity. As a general rule, ―[f]or purposes of taxation, what matters is substance, not form.‖ (Microsoft Corp. v. Franchise Tax Bd. (2006) 39 Cal.4th 750, 760.) But the majority adopts a rule that reaches well beyond this substance over form principle, concluding that the DTTA applies to a document by which entity interests are transferred, for consideration, if the transaction results in a transfer of beneficial ownership of real
The majority reaches this conclusion in two steps: It first relies on federal authorities to ―conclude that the critical factor in determining whether the documentary transfer tax may be imposed is whether there was a sale that resulted in a transfer of beneficial ownership of real property.‖ (Maj. opn., ante, at p. 19.) The majority then goes on to borrow from the property tax law‘s change in ownership rules, which, it contends, ―are designed to identify precisely the types of indirect real property transfers that the Transfer Tax Act is designed to tax.‖ (Id. at p. 20.) Both steps of this analysis are flawed.
The majority‘s analysis begins by reviewing a number of federal cases applying the federal stamp act in the context of corporate transactions. The lesson the majority draws from this review is that ―courts often focused on whether there was a change in beneficial ownership of the real property.‖ (Maj. opn., ante, at p. 17.) The description is technically true, but it is incomplete. The cases on which the majority relies — unlike this case — involved deeds and other similar instruments transferring title to real property. The courts in those cases determined whether the deed or other instrument was taxable by considering whether the transfer of title also resulted in a change in beneficial ownership of the realty. (Compare Carpenter v. White (1st Cir. 1935) 80 F.2d 145, 146–147 [realty deeds were subject to stamp tax] with Berry v. Kavanagh (6th Cir. 1943) 137 F.2d 574, 576 [deed of realty from receiver to reinsurer evidenced a transfer of policyholders‘ reserve, not a sale whereby the reinsurer received beneficial
The question here, however, is not whether the transfer of legal title is a taxable sale in the absence of a transfer of beneficial or equitable ownership. It is whether the transfer of beneficial or equitable ownership, standing alone, is a sale of realty even in the absence of a document transferring legal title. To the extent the federal authorities speak to this question, they point in the other direction. In United States v. Seattle Bank (1944) 321 U.S. 583, a state bank and a federal bank consolidated pursuant to the National Banking Act, and executed a written consolidated agreement providing that ―[a]ll assets of each association at the date of consolidation shall pass to and vest in the consolidated association . . . .‖ (Id. at p. 585.) A tax collector exacted stamp taxes from the consolidated bank. (See ibid.; see also Int. Rev. Service, Chief Counsel‘s Mem. No. 22955, Regulations 71 (1932), Article 79: ―Sold‖ Defined (1941), 1941-2 C.B. 308, 311–312 [discussing this theory].) The high court held that the consolidated bank owed no stamp taxes, including stamp taxes on instruments conveying realty. The court explained: ―[T]he state bank‘s realty was not conveyed to or vested in respondent by means of any deed, instrument or writing. There was a complete absence of any of the formal instruments or writings upon which the stamp tax is laid. Nor can the realty be said to have been ‗sold‘ or vested in a ‗purchaser or purchasers‘ within the ordinary meanings of those terms. Only by straining the realities of the statutory consolidation process can respondent be said to have ‗bought‘ or ‗purchased‘ the real property.‖ (Seattle Bank, at p. 590.) The court so concluded even though there had been a transfer of beneficial ownership of the state bank‘s assets for consideration: The state bank‘s shareholders traded their entire beneficial ownership of the state bank‘s assets for partial beneficial ownership of the consolidated bank‘s assets. (See id. at p. 585; cf. Carpenter v. White, supra, 80 F.2d at p. 146; Rev. Ruling No. 57-580, 1957-2 C.B. 768, 770 [ruling, based on Seattle Bank, that no stamp tax would be due on instruments conveying realty despite a 92 percent change in beneficial ownership of realty].) All this suggests that a transfer of beneficial ownership was perhaps necessary before the federal stamp tax on documents transferring realty could be imposed, but was not a sufficient condition for the laying of the tax.
If a change in beneficial ownership of realty, by itself, were the touchstone of taxation, then, in theory, any sale of stock or other entity interest could trigger the documentary transfer tax. The majority does not go so far,
The majority thus construes the DTTA and the property tax law‘s change in ownership rules as if they operated in pari materia. But the two statutes were enacted at different times and for different purposes. As noted above, the Legislature enacted the DTTA in 1967, after Congress repealed the federal stamp tax on instruments conveying realty. The Legislature enacted the change in ownership rules in 1979, as part of a package of reforms giving effect to Proposition 13, a voter initiative designed to provide property tax relief. (See, e.g., Strong v. State Bd. of Equalization (2007) 155 Cal.App.4th 1182, 1186–1187, 1193.) These statutory schemes also relate to distinct types of taxes: Whereas the documentary transfer tax is an excise tax on the privilege of selling real property interests — and is imposed only when that right is exercised — real property taxes are imposed on the property itself, and on a recurring basis. (See City of Huntington Beach v. Superior Court (1978) 78 Cal.App.3d 333, 340–342 [a city‘s real property transfer tax did not violate the city charter‘s limitation on real property taxes]; Fielder v. City of Los Angeles (1993) 14 Cal.App.4th 137, 144–146.)
The DTTA does not purport to incorporate the later-enacted property tax laws, nor do the property tax laws purport to amend the DTTA. And differences between the two statutory schemes make clear that the rules applicable in one context cannot be imported wholesale into the other. To take one basic example, whereas the documentary transfer tax is imposed on instruments conveying ―realty sold,‖ the property tax law‘s change in ownership rules do not require a transfer for consideration. (Compare
More fundamentally, to apply the property tax law‘s change in ownership framework in the documentary transfer tax context raises a difficult set of questions addressed nowhere in either statute. For property tax purposes, if an entity interest transfer qualifies as a change in ownership under
The documentary transfer tax is, by contrast, an excise tax on the privilege of selling a real property interest, not a tax on the property itself, and is calculated on the net value of the interest conveyed. (
Applying the property tax rules in the DTTA context also raises difficult valuation questions. One hypothetical example will suffice to illustrate the point. In the transaction at issue in this case, trusts benefiting Gloria Averbook transferred a roughly 90 percent interest in BA Realty LLLP (BA Realty) to trusts benefiting her sons, Allen and Bruce. This resulted in a change in ownership of an apartment building indirectly owned by BA Realty, and the County of Los Angeles (County), concededly correctly, reappraised the value of the building. The County also imposed a documentary transfer tax based on the entire newly assessed value of the building, not on the 90 percent economic interest that Gloria‘s trusts transferred nor on the amount Allen‘s and Bruce‘s trusts paid for that interest.5 If Gloria‘s trusts sold their remaining interests in BA Realty to one of the son‘s trusts, there would be another change in ownership of the building. (See
III.
In the end, the majority‘s interpretation of the DTTA appears motivated by a concern not implicated here: ―Under LLC‘s construction of the statute, if A executed a deed transferring real property to B, that deed would be taxable. But if A created a limited liability company, executed a deed transferring real property to that company, and then executed a written instrument transferring the company to B, the tax would not apply. That approach would elevate form over substance, and conflict with the purposes of the Transfer Tax Act.‖ (Maj. opn., ante, at p. 21.) I acknowledge the concern, but existing law supplies answers. (See, e.g., Fashion Valley Mall, LLC v. County of San Diego (2009) 176 Cal.App.4th 871, 880 [courts may disregard transactions that are mere ―shams,‖ lacking in economic substance].) Here, no one doubts that the transaction at issue was bona fide, completed for legitimate reasons, and had economic substance. To nevertheless apply the DTTA marks a significant expansion of the documentary transfer tax.
The majority‘s expansion of the DTTA may or may not be a good idea, but it ventures well beyond the statute‘s language and historical practice. I would leave it to the Legislature to determine the circumstances under which an entity interest transfer should result in a deemed sale of the entity‘s real estate, and how to calculate the tax due in those circumstances.
KRUGER, J.
See last page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion 926 North Ardmore Avenue, LLC v. County of Los Angeles
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 229 Cal.App.4th 1335
Rehearing Granted
Opinion No. S222329
Date Filed: June 29, 2017
Court: Superior
County: Los Angeles
Judge: Rita J. Miller
Counsel:
FisherBroyles, Goodson Wachtel and Petrulis, Lemoine Skinner III; Gibson, Dunn & Crutcher, Daniel M. Kolkey, Julian W. Poon, Lauren M. Blas and Martie P. Kutscher for Plaintiff and Appellant.
Pillsbury Winthrop Shaw Pittman, Kevin M. Fong, Jeffrey M. Vesely, Kerne H.O. Matsubara for Council on State Taxation as Amicus Curiae on behalf of Plaintiff and Appellant.
Law Office of Peter Michaels and Peter Michaels for California Alliance of Taxpayer Advocates as Amicus Curiae on behalf of Plaintiff and Appellant.
Arent Fox, Stephen G. Larson and Steven A. Haskins for California Society of Certified Public Accountants as Amicus Curiae on behalf of Plaintiff and Appellant.
Ajalat, Polley, Ayoob & Matarese, Richard J. Ayoob, Christopher J. Matarese and Gregory R. Broege for Institute for Professionals in Taxation as Amicus Curiae on behalf of Plaintiff and Appellant.
Greenberg Traurig, C. Stephen Davis, Cris K. O‘Neall and Andrew W. Bodeau for California Taxpayers Association as Amicus Curiae on behalf of Plaintiff and Appellant.
June Babiracki Barlow, Neil Kalin and Jenny Li for California Association of REALTORS as Amicus Curiae on behalf of Plaintiff and Appellant.
John F. Krattli, County Counsel, Mary C. Wickham, Interim County Counsel, and Albert Ramseyer, Principal Deputy County Counsel, for Defendant and Respondent.
Michael N. Feuer, City Attorney (Los Angeles), Beverly Cook, Assistant City Attorney, and Daniel, M. Whitley, Deputy City Attorney, for City of Los Angeles as Amicus Curiae on behalf of Defendant and Respondent.
Counsel:
Arthur J. Wylene, County Counsel (Tehama) for County of Tehama and Jennifer A. Vise, Tehama County Clerk-Recorder as Amici Curiae on behalf of Defendant and Respondent.
Donna R. Ziegler, County Counsel (Alameda) and Farand C. Kan, Deputy County Counsel, for County of Alameda as Amicus Curiae on behalf of Defendant and Respondent.
Daniel C. Cederborg, County Counsel (Fresno) and Jane T. Smith, Deputy County Counsel, for County of Fresno as Amicus Curiae on behalf of Defendant and Respondent.
Theresa A. Goldner, County Counsel (Kern) and Jerri S. Bradley, Deputy County Counsel, for County of Kern and Jon Lifquist, Kern County Assessor-Recorder as Amicus Curiae on behalf of Defendant and Respondent.
Marshall S. Rudolph, County Counsel (Mono) and John-Carl Vallejo, Deputy County Counsel, for County of Mono as Amicus Curiae on behalf of Defendant and Respondent.
Charles J. McKee, County Counsel (Monterey) and Jerrold A. Malkin, Deputy County Counsel, for County of Monterey and Stephen L. Vagnini, Monterey County Assessor-Clerk-Recorder as Amicus Curiae on behalf of Defendant and Respondent.
Matthew W. Granger, County Counsel (San Benito) and Barbara J. Thompson, Deputy County Counsel, for County of San Benito and Joe Paul Gonzalez, San Benito County Clerk, Auditor & Recorder as Amicus Curiae on behalf of Defendant and Respondent.
Gregory P. Priamos, County Counsel (Riverside) and Kristine Bell-Valdez, Deputy County Counsel, for County of Riverside and Peter Aldana, Riverside County Assessor as Amicus Curiae on behalf of Defendant and Respondent.
Michael Ghizzoni, County Counsel (Santa Barbara) and Marie A. LaSala, Deputy County Counsel, for County of Santa Barbara and Joseph E. Holland, Santa Barbara County Assessor as Amicus Curiae on behalf of Defendant and Respondent.
Brian Wirtz, County Counsel (Placer) for County of Placer and Jim McCauley, Placer County Clerk-Recorder-Registrar as Amici Curiae on behalf of Defendant and Respondent.
Thomas E. Montgomery, County Counsel (San Diego) and Walter de Lorrell III, Deputy County Counsel, for County of San Diego and Ernest J. Dronenburg, Jr., County of San Diego Assessor/Recorder/County Clerk as Amici Curiae on behalf of Defendant and Respondent.
John C. Beiers, County Counsel (San Mateo) and Rebecca M. Archer, Deputy County Counsel, for County of San Mateo as Amicus Curiae on behalf of Defendant and Respondent.
John P. Doering, County Counsel (Stanislaus) and Deirdre McGrath, Deputy County Counsel, for County of Stanislaus as Amicus Curiae on behalf of Defendant and Respondent.
Counsel:
Minh C. Tran, County Counsel (Napa) and Susan Altman, Deputy County Counsel, for County of Napa and John Tuteur, Napa County Assessor-Recorder-County Clerk as Amici Curiae on behalf of Defendant and Respondent.
Bruce Goldstein, County Counsel (Sonoma) and Linda Schiltgen, Deputy County Counsel, for County of Sonoma and William F. Rousseau, Sonoma County Clerk-Recorder-Assessor as Amici Curiae on behalf of Defendant and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Daniel M. Kolkey
Gibson, Dunn & Crutcher
555 Mission Street, Suite 3000
San Francisco, CA 94105-2933
(415) 393-8200
Albert Ramseyer
Principal Deputy County Counsel
648 Kenneth Hahn Hall of Administration
500 West Temple Street
Los Angeles, CA 90012-2713
(213) 974-0809
Arthur J. Wylene
County Counsel
727 Oak Street
Red Bluff, CA 96080
(530) 527-9252
Notes
Citing various secondary sources, the majority also notes that ―the question whether the transfer tax applies to indirect transfers of real property has been the focus of an ongoing debate.‖ (Maj. opn., ante, at p. 13, fn. 14.) But the cited sources merely describe the recent practice by some counties — including the County of Los Angeles — of assessing tax on entity interest transfers, and discuss recent case law permitting that practice — including, primarily, the decision of the Court of Appeal in this very case. (See Cruz & Rogers, A Practical Guide to Transfer Taxes in California (Spring 2005) 23 Cal. Real Property J. 13, 14; Cruz, 2015 Update: Transfer Taxes in California (2015) 33 Cal. Real Property J. 5, 9; see also Obico, Taxation of the Transfer of Single Member LLCs That Own Real Estate (June 2012) 35 L.A. Law. 11, 12 [taking the position that the Los Angeles County Recorder lacked authority to impose tax upon the transfer of a controlling interest in a single-member limited liability company].) Ultimately, the sources do no more than describe the terms of the very ―debate‖ between the parties we are asked to resolve here; they offer no substantive support for the manner in which the majority resolves the debate.