Wednesday, August 30, 2017

People v. Seals (Cal. Ct. App. - Aug. 27, 2017)

Someone steals something (a phone) that costs $900, but with sales tax, it would cost $972.

Whether that's commercial burglary (a felony) or shoplifting (a misdemeanor) depends on whether  "the value of the property that is taken . . . exceed[s] nine hundred fifty dollars ($950)."

Well?  Does it?

Do you count the sales tax, or not?

I definitely could see competing visions here.  On the one hand, the "value" of the property could be seen as only the $900, since that's the "worth" of the "thing".  On the other hand, its value could be the whole $972, since that's what it would in fact cost -- what a willing buyer and seller would agree on.

The Court of Appeal agrees with the latter approach.  Which is different than courts in some other jurisdictions.

Its reasoning (in part):

"Unlike the sales tax law and administration described in several of the cases from other jurisdictions, California law does not obligate a merchant to collect a sales tax from the customer. This is a significant distinguishing factor. In California, whether the retailer seeks a sales tax reimbursement from the customer is a matter of contract between the buyer and seller. Under this sales tax framework, the addition of sales tax reimbursement to the cost of an item is an indication of that item’s fair market value: the total and highest price to which the willing buyer and seller agree."

That makes sense.  The retailer is paying the tax, so adds it to the cost of the product.  Just like the retailer is paying rent, which is also (albeit less expressly) added to the cost of the product.

Though you see the other side as well:  that the "value" of the property is still only $900, if only as established by (1) the fact that that's what this same product would indeed be sold for (in places with no sales tax, or when exempt from tax), and (2) that's all the retailer loses if the phone is stolen -- as here (since no sales tax is paid).

Tough call.  Though I like the scope and coherence of the Court of Appeal's view here.  It takes the matter seriously, and its analysis is pretty darn good.

Even as I understand that the other side has definitely good arguments as well.

(At minimum, the lesson learned here is (1) don't steal something worth $900, or (2) if you do, steal it from someplace that doesn't charge sales tax.)