Lennane v. Franchise Tax Board

Opinion

KENNARD, J.

We granted review in this case to construe tax statutes— Revenue and Taxation Code sections 17063.11 and 18162.5—that have been repealed yet continue to govern the disposition of outstanding tax claims in excess of $300 million. At issue is the extent of California income tax liability for capital gain on the sale of “small business stock” that plaintiffs and other California taxpayers acquired on or before September 16, 1981, and sold between 1981 and 1987.

For the tax year 1986 (the tax year at issue here), capital gain from the sale of assets that had been held for more…