Beamer v. Franchise Tax Board

Opinion

MOSK, J.

We consider here the deductibility under Revenue and Taxation Code section 172041 of certain taxes paid to the State of Texas by respondent taxpayers. To make this determination we must resolve two issues: (1) the proper construction of section 17204, which enumerates those taxes paid to other authorities' that are deductible from California personal income tax, and (2) whether the Texas taxes are “on or according to or measured by income or profits.” (§ 17204, subd. *470(c)(2).) We conclude that the Texas taxes cannot be characterized as taxes on income, and hence are deductible.

Th…