Navistar International Transportation Corp. v. State Board of Equalization

Opinion

KENNARD, J.

—California imposes a sales tax on the retail sale of tangible personal property (Rev. & Tax. Code, § 6051),1 but excludes from taxation the transfer of intangible property and the transfer of a “custom computer program” (§ 6010.9). The issues here are:

1. When a company’s trade secrets or other intellectual work product are embodied in documents, is the sale of those documents a transfer of tangible personal property and thus taxable, or does the intellectual content of the documents render the sale a nontaxable transfer of intangible property?

2. When a company develops a…