Anaheim Union Water Co. v. Franchise Tax Board

Opinion

MORONY, J. *

This case involves the taxation of a mutual water company under the provisions of the California franchise tax law relating to cooperative associations. Such an association is allowed certain special deductions in computing its taxable income. All income from its business activities for or with the association’s members or on a nonprofit basis with nonmembers is excludable from its gross income. However, the expenses incurred in producing such excludable gross income are not deductible in computing its taxable net income. (Rev. & Tax. Code, §§ 24401, 24405, 24421 and 24425.)