General Motors v. Franchise Tax Board

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Filed 7/28/04 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO GENERAL MOTORS CORPORATION et al., Plaintiffs and Appellants, v. B165665 (Los Angeles County Super. Ct. No. BC269404) ORDER MODIFYING OPINION AND DENYING REHEARING FRANCHISE TAX BOARD, [NO CHANGE IN JUDGMENT] Defendant and Appellant. THE COURT: It is ordered that the opinion filed herein June 30, 2004, be modified as follows: 1. The third sentence on page 2, beginning We conclude that, is modified so that it reads: We conclude that, in calculating the amount of income apportionable to California, the Franchise Tax Board properly excluded returns of principal from certain securities transactions denominated as gross receipts. 2. On page 3, line 2 of the second paragraph beginning on that page, the phrase §25130 et seq. is changed to §25120 et seq. 3. On page 7, footnote 4 is changed by deleting the first close quotation mark (immediately after the word minor ). 4. On page 8, the second sentence is changed by adding the word to after the word as and before the word two so that the sentence reads: The court also granted the FTB s cross-motion for summary adjudication as to two causes of action. 5. The last sentence of the first full paragraph on page 9 is modified by adding the name Treasury Department so that the sentence reads: Thus, approximately $497 million of GM s Treasury Department income was agreed to be business income apportionable to California. 6. On page 9, the statutory reference to section 24134 in the second sentence of the fourth full paragraph is changed to section 25134. 7. On page 14, delete the period before the close parenthesis mark at the end of the third sentence of the last paragraph and insert a period immediately after the close parenthesis mark. 8. The last sentence beginning on page 17 is modified by deleting the phrase from taxes so that the sentence now reads: GM s argument that these dividends are not on or according to or measured by income is premised on taking into account intercompany eliminations under section 25106. 9. On page 21, on the third line of the second full paragraph, the statutory reference to section 24404 is changed to section 24402. 10. In the Appendix to the opinion replace Table A with the version of Table A attached to this order. There is no change in the judgment. The petition for rehearing filed by appellants and cross-respondents General Motors Corporation et al., is denied. 2 APPENDIX TABLE A 1986 T-Bills U.S. T-Notes CDs Corp. Securities Agencies Direct Sales $725,320,275 Total $23,260,847,776 $551,715,605 $0 $0 $24,537,883,656 (6.6%) Maturities 1,444,276,542 6,453,162,487 82,000,000 836,000,000 $12,858,749,029 4,043,310,000 (3.5%) Repurchases 287,650,000 100,547,409,545 230,686,701,228 0 0 $331,521,760,774 (89.9%) TOTAL $2,457,246,817 $130,261,419,808 $836,000,000 $4,043,310,000 $368,918,393,459 CDs $231,320,416,835 Corp. Total 1987 T-Bills U.S. T-Notes Securities Agencies Direct Sales $312,740,587 $8,583,576,790 $1,130,001,710 $0 $10,366,275,809 $159,956,721 (4.4%) Maturities 55,860,000 4,000,000 0 3,064,100,000 $7,257,176,871 4,133,216,871 (3%) Repurchases 0 56,203,779,391 165,342,918,179 0 0 $221,546,697,571 (92.6%) TOTAL $368,600,588 $64,791,356,182 $166,652,919,890 $3,064,100,000 $4,293,173,592 $239,170,150,251 CDs Corp. Total 1988 U.S. T-Bills T-Notes Securities Agencies Direct Sales $406,276,600 $2,150,723,277 $249,928,711 $50,000,000 $20,555,400 $2,877,483,987 (8%) Maturities 363,941,378 6,500,000 2,500,000 6,773,899,480 35,234,812,305 $42,381,653,163 (11.7%) Repurchases 50,697,621 35,249,485,506 279,985,900,781 0 100,000,000 $315,386,083,908 (87.5%) TOTAL $820,915,599 $37,406, 708, 784 $280,238,329,492 3 $6,823,899,480 $35,355,367,705 $360,645,221,059

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