Filed 10/10/17

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

JETSUITE, INC.,

Plaintiff and Appellant,

v.

COUNTY OF LOS ANGELES,

Defendant and Respondent.

 B279273

 (Los Angeles County

 Super. Ct. No. BC559245)

APPEAL from a judgment of the Superior Court of Los 

Angeles County. Michael L. Stern, Judge. Affirmed.

Ajalat, Polley, Ayoob & Matarese, Richard J. Ayoob, 

Gregory R. Broege and Sevanna Hartonians for Plaintiff and 

Appellant.

Mary C. Wickham, County Counsel, Albert Ramseyer, 

Principal Deputy County Counsel and Richard Girgado, Senior 

Deputy County Counsel; Lamb & Kawakami, Michael K. Slattery

and Shane W. Tseng for Defendant and Respondent.

* * * * * *
2

Due process prohibits a state from imposing a tax on the 

full value of personal property if other states also have the right 

to tax that property, and whether those states have that right 

turns on whether that property has “situs” in those other states. 

(Central R. Co. v. Pennsylvania (1962) 370 U.S. 607, 611-614 

(Central); Flying Tiger Line, Inc. v. County of Los Angeles (1958) 

51 Cal.2d 314, 318 (Flying Tiger).) The taxing authority in this 

case sought to impose property tax on the full value of six jets 

used to operate an on-demand “air taxi” service. During the 

pertinent timeframe, one of those jets flew to 309 different 

airports in 42 different states and six different countries. This 

case accordingly presents the question: Does the fact that an 

aircraft touches down in another state, without more, mean that 

the other state has acquired situs over the aircraft under the 

traditional due process test for situs, such that California may no 

longer tax the full value of the aircraft? We conclude that the 

answer is “no,” and affirm the judgment below.

FACTS AND PROCEDURAL BACKGROUND

I. Facts

In 2010, plaintiff and appellant JetSuite, Inc. (JetSuite) 

owned six Embraer Phenom 100 jets. It operated an 

“unscheduled air taxi” service that offered on-demand flights. 

JetSuite was incorporated in Delaware, but headquartered in 

Long Beach, California. Its planes had no permanent hangar 

space and received any necessary scheduled maintenance at the 

manufacturer’s service facilities in Van Nuys, California and 

Mesa, Arizona. In 2010, one of the jets flew to 309 airports 

located in 42 different states and six different countries; JetSuite 

calculated that this aircraft spent 60.88 percent of its time in 

California.
3

In 2011, respondent and defendant County of Los Angeles 

(County) assessed personal property tax on all six jets at 1

percent of their full value and, in so doing, looked to the jets’ 

activity in calendar year 2010. No other jurisdiction taxed the 

jets that year.

II. Procedural Background

A. Administrative proceedings

In December 2011, JetSuite challenged the County’s 

assessment, seeking a tax refund of $89,839 on the ground that 

the County should not have assessed the tax on the full value of 

the jets because the jets could have been taxed by other states.

The Los Angeles County Assessment Appeals Board 

(Board) held an evidentiary hearing in November 2013, analyzing 

the issues for all six jets based on one representative aircraft, and 

issued a written ruling rejecting JetSuite’s challenge in April 

2014. JetSuite argued to the Board that its jets had acquired 

“tax situs” in other states for two reasons: (1) Revenue and 

Taxation Code section 1161, subdivision (b)1 provides that situs is 

established in California “if an aircraft . . . makes a landing in 

the state,” and (2) other states conferred “benefits [and] 

protection” upon JetSuite by providing fire and other protection 

services at their airports.2 The Board rejected both arguments. 

The Board ruled that section 1161 by its terms applied only to 

“fractionally owned aircraft” (and not aircraft with a single 

 

1 All further statutory references are to the Revenue and 

Taxation Code unless otherwise indicated.

2 JetSuite also argued that the County’s act violated the 

federal Tax Equity and Fiscal Responsibility Act of 1982 

(26 U.S.C. § 6221 et seq.), but the Board rejected that claim, and 

JetSuite does not renew the claim on appeal.
4

owner) and that the benefits and protection JetSuite cited were 

“not shown to be more than those afforded any other transient 

aircraft that lands at any airport in or outside of California.

JetSuite’s transitory contact with the cities it flew into,” the 

Board concluded, “was not sufficient to establish a tax situs since 

the intent was to drop off passengers and to fly elsewhere at the 

earliest opportunity.”

B. Lawsuit

In October 2014, JetSuite filed a petition for an

administrative writ of mandate seeking to overturn the Board’s 

ruling.

In addition to a full round of briefing, JetSuite asked the 

trial court to take judicial notice of a ruling of the Utah State Tax 

Commission finding that Utah had acquired situs over JetSuite’s 

fleet of jets in 2013. The court submitted the matter for trial on 

the papers.

In October 2016, the trial court filed a written statement of 

decision denying JetSuite’s writ petition. The court ruled that 

JetSuite’s evidence did “not establish situs of its aircraft for tax 

year 2011 outside of California.” The court rejected JetSuite’s 

“proffered statistical evidence” as “sketchy and conclusory”—and 

hence, insufficient—because that evidence did not show the 

duration of time the jets spent in other states; “[s]imply asserting 

that some percentage of landings or take-offs occurred in other 

states by itself does not,” the court reasoned, “establish situs for 

the purposes of apportioning taxes.” The court also observed that 

no other state had imposed taxes on JetSuite’s aircraft that year, 

and determined that Utah’s taxation three years later was 

irrelevant.
5

Following the entry of judgment, JetSuite filed this timely 

appeal.

DISCUSSION

JetSuite contends that the trial court—and the Board 

before it—erred in rejecting its claim that the County was 

prohibited from taxing the full value of its jets in tax year 2011,

because those jets had acquired tax situs in other states.

JetSuite’s lawsuit is before us on a petition for a writ of 

administrative mandate. (Code Civ. Proc., § 1094.5, subd. (a).) 

We may issue such a writ only if (1) the administrative agency 

acted “without, or in excess of, jurisdiction,” (2) the petitioner was 

not accorded a “fair trial,” or (3) “there was [a] prejudicial abuse 

of discretion” because the agency did “not proceed[] in the manner 

required by law,” its “order or decision is not supported by the 

findings” or its “findings are not supported by the evidence.” (Id., 

§ 1094.5, subd. (b).) Except where a fundamental vested right is 

at issue, a court will review a claim that an administrative 

agency committed a prejudicial abuse of discretion—the sole 

basis for JetSuite’s petition—for substantial evidence. (Id., 

§ 1094.5, subd. (c); Berlinghieri v. Department of Motor Vehicles

(1983) 33 Cal.3d 392, 395-396.) Although there is a fundamental

right “‘to pursue a lawful business or occupation,’” “‘there is no 

vested right to conduct a business free of reasonable 

governmental rules and regulations.’” (Raytheon Co. v. Fair 

Employment & Housing Com. (1989) 212 Cal.App.3d 1242, 1251, 

italics added.) Because taxation is a form of governmental 

regulation (see San Francisco v. Liverpool & London & Globe Ins. 

Co. (1887) 74 Cal. 113, 123; Kaufman v. ACS Systems, Inc. (2003) 

110 Cal.App.4th 886, 918-919), our review is confined to 

examining whether the Board’s ruling is supported by substantial 
6

evidence, except as to questions of law—including the validity of 

the method of valuation—which we review de novo. (Elk Hills 

Power, LLC v. Board of Equalization (2013) 57 Cal.4th 593, 606; 

Auerbach v. Los Angeles County Assessment Appeals Bd. No. 2

(2008) 167 Cal.App.4th 1415, 1420.) In undertaking this review, 

we stand in the shoes of the trial court and review the decision of 

the administrative agency, not the trial court. (Auerbach, 

at p. 1420.)

I. Taxation

A. Taxation generally

Our state Constitution makes “[a]ll property . . . taxable” 

(Cal. Const., art. XIII, § 1, subd. (a)), and requires local 

governments to impose and collect property taxes (id., art. XIII, 

§ 14; Sea-Land Service, Inc. v. County of Alameda (1974) 

12 Cal.3d 772, 779 (Sea-Land Service) [taxation is “mandatory”]). 

Personal property is to be taxed at its “full value” (Cal. Const., 

art. XIII, § 1, subd. (b)), and the tax is to equal 1 percent of its 

fair market value (id., art. XIII A, §§ 1, subd. (a) & 2; §§ 106, 

110.5, 135, subd. (a) & 401). Aircraft are taxable as personal 

property. (§§ 5301 & 5362.)

B. Taxation of movable personal property

When personal property moves beyond a state’s borders, as 

is the case with river barges, railcars, and aircraft, the question 

of taxation becomes trickier because the state’s power to tax also 

implicates the federal due process clause, which limits the state’s

extraterritorial reach. (Norfolk & W. R. Co. v. Tax Comm’n

(1968) 390 U.S. 317, 325 (Norfolk) [noting due process is 

concerned with a state “‘project[ing] [its] taxing power . . . beyond 

its borders’”]; see generally Internat. Shoe Co. v. Washington

(1945) 326 U.S. 310, 316-317.)
7

At first, the courts took an “all or nothing” approach when 

defining the due process limits on a state’s power to tax personal 

property that moved beyond its borders. The sine qua non of this 

approach was the “home port doctrine,” which provided that the 

state where the property’s owner was domiciled could tax all of 

the property, and other states or nations could tax none of it. 

(Hays v. Pac. Mail S.S. Co. (1855) 58 U.S. 596, 599-600.) These 

days, however, the home port doctrine is, “if not dead, 

functionally comatose.” (GeoMetrics v. County of Santa Clara

(1982) 127 Cal.App.3d 940, 947-948; Japan Line, Ltd. v. County 

of Los Angeles (1979) 441 U.S. 434, 442 (Japan Line) [doctrine 

has “fallen into desuetude”].)

Now, due process embodies “a rule of fair apportionment 

among the States.” (Japan Line, supra, 441 U.S. at p. 442.) 

Under this rule, a state having situs over personal property may 

tax all of that property unless one or more other states also has

situs over that property. (Central, supra, 370 U.S. at pp. 611-

614; Sea-Land Service, supra, 12 Cal.3d at p. 787; Flying Tiger, 

supra, 51 Cal.2d at p. 318.) What matters is not whether the 

other state actually has taxed the property, but instead whether 

the other state could tax the property (because it also has situs 

over the property). (Central, at p. 614; Scandinavian Airlines 

System, Inc. v. County of Los Angeles (1961) 56 Cal.2d 11, 30-32 

(Scandinavian Airlines).) It is the taxpayer’s burden to show 

situs in other states. (Central, at p. 613.)

As this discussion indicates, situs—and, more to the point, 

the definition of situs—is critical to the fair apportionment rule. 

A property has situs in a state when it is “habitually employed” 

or “habitually situated” in that state. (Norfolk, supra, 390 U.S. 

at pp. 323-324 [“habitually employed”]; Central, supra, 370 U.S. 
8

at p. 615 [same]; Sea-Land Service, supra, 12 Cal.3d at p. 780 

[same]; Zantop Air Transport, Inc. v. County of San Bernardino 

(1966) 246 Cal.App.2d 433, 437 [“situated” synonymous with 

situs].)

Whether personal property is habitually employed or 

habitually situated in a state turns on two considerations: (1) the 

“[l]ength of time th[e] property is in the [state] and the intent of 

its presence,” and (2) the “nature of the property owner’s contact 

with the [state].” (Ice Capades, Inc. v. County of Los Angeles

(1976) 56 Cal.App.3d 745, 753-754 (Ice Capades); County of San 

Diego v. Lafayette Steel Co. (1985) 164 Cal.App.3d 690, 694 

(Lafayette Steel).) A state is more likely to acquire situs under 

the first consideration if the owner intends the property “to 

remain” in the state “for an indefinite period or for a relatively

long time,” and less likely to acquire situs when its owner acts 

“with the intent that [the property] remain [in the state] for a 

short period and then be moved elsewhere.” (Ice Capades, 

at p. 753.) A state is more likely to acquire situs over property 

under the second consideration if it confers “‘opportunities, 

benefits, or protection.’” (Id. at pp. 753-754; Ott v. Mississippi 

Barge Line (1949) 336 U.S. 169, 174; Braniff Airways v. Nebraska 

Board (1954) 347 U.S. 590, 600 (Braniff Airways).) The 

opportunities, benefits, and protection must be “substantial”

before situs is established (Flying Tiger, supra, 51 Cal.2d at 

p. 319); “the furnishing of benefit and protection, standing alone,” 

is not enough to “confer” situs (Scandinavian Airlines, supra, 

56 Cal.2d at p. 31).

C. Taxation of aircraft in California

For purposes of personal property taxation, California 

divides aircraft into four categories: (1) certificated aircraft (that 
9

is, federally regulated aircraft that offer commercial 

transportation) (§ 1150); (2) air taxis (that is, small aircraft 

operated by a carrier that does not use aircraft above a certain 

size) (§ 1154, subd. (a)); (3) general aircraft (that is, aircraft 

privately owned by an individual or entity) (§ 5303); and 

(4) fractionally owned aircraft (that is, aircraft owned by several 

individuals or entities who are entitled to use the aircraft in 

proportion to their ownership interest, somewhat like a time 

share) (§ 1160 et seq.). California law further divides air taxis

into two subcategories: (1) air taxis that operate in scheduled 

flight service, which are assessed in the same manner as 

certificated aircraft (§ 1154, subd. (b)); and (2) air taxis that 

operate on an on-demand, unscheduled basis, which are assessed

in the same manner as general aircraft (§ 1154, subd. (c)).

For nearly all of these categories and subcategories of 

aircraft, California has adopted the due process-based definition 

of situs—either expressly or by failing to define a different 

definition. (See § 1155 [for certificated aircraft, defining situs as 

states where “the aircraft normally make physical contact with 

sufficient regularity to entitle such agencies to tax the aircraft 

under the laws and Constitution of the United States”]; see 

§ 5362 [for general aircraft not operating as air taxis, defining 

situs as between counties as where “the aircraft is habitually 

situated”]; § 1154, subd. (c) [for unscheduled air taxis, defining 

situs as between counties as where “the aircraft is habitually 

situated”].)3 The sole exception is fractionally owned aircraft. As 

 

3 Although these aircraft all use the same definition of situs, 

they do not all use the same rule for allocating taxes between 

multiple jurisdictions. (See §§ 1151 & 1152 [setting up special 

allocation rule for certificated aircraft and scheduled air taxis].) 
10

to these aircraft and these aircraft alone, our Legislature has 

adopted a special situs rule: Situs is established over “[a] fleet of 

fractionally owned aircraft . . . if an[y] aircraft within the fleet

makes a landing in the state.” (§ 1161, subd. (b).)

II. Analysis

Under this law, whether the County has acted properly in 

taxing the full value of JetSuite’s jets turns on whether there is 

substantial evidence to support the Board’s finding that JetSuite 

failed to prove that any other state acquired situs over those jets 

in 2010. We conclude substantial evidence supports the Board’s 

ruling.

Situs, as noted above, turns on (1) the length of time the 

property is in another state as well as whether the property was 

intended to be there indefinitely or temporarily, and (2) the 

“‘opportunities, benefits, or protection’” the other state has 

afforded the property. (Ice Capades, supra, 56 Cal.App.3d 

at pp. 753-754; Lafayette Steel, supra, 164 Cal.App.3d at p. 694.) 

JetSuite calculated that the representative jet analyzed at the 

hearing spent 60.88 percent of its time in 2010 in California. But 

JetSuite never established that the time the aircraft spent in 

each state outside of California was more than the sum of 

incidental touch downs in that state and never showed the 

benefits and protection any particular state conferred upon those 

jets. Further, JetSuite’s jets were “just passing through” the 

states where they landed; JetSuite’s intent was, as the Board put 

it, “to drop off passengers and to fly elsewhere at the earliest 

opportunity.” In short, JetSuite did not prove situs in any other 

specific state. In the absence of such proof, “it is surely 

 

These differences in allocation are not relevant to this appeal, 

which deals solely with the threshold question of situs.
11

appropriate to presume that the domicile [state]”—here, 

California—“is the only [state] affording the ‘opportunities, 

benefits, or protection’ which due process demands as a 

prerequisite for taxation.” (Central, supra, 370 U.S. at p. 612.)

JetSuite raises three arguments in response.

First, JetSuite argues that its evidentiary showing was 

sufficient. Specifically, JetSuite asserts that we must presume 

that each state and country where its jets landed offered the 

benefits and protection of fire and other airport services to those 

jets, and that the provision of these services by itself establishes 

situs. Although “aircraft land[ing] at airports . . . benefit from 

local services, including, but not limited to, police and fire 

protection” (NetJets Aviation, Inc. v. Guillory (2012) 

207 Cal.App.4th 26, 50 (NetJets)), the provision of those services 

does not automatically confer situs. The states hosting a

traveling ice skating show in Ice Capades ostensibly offered police 

and fire protection during the show’s multi-week stay in these 

states, but this was “not sufficient to establish a tax situs.” 

(Ice Capades, supra, 56 Cal.App.3d at p. 754.) Other cases 

finding that a state has situs over aircraft have rested upon 

evidence showing regular and frequent contact between the 

aircraft and that specific state. (Braniff Airways, supra, 347 U.S. 

at pp. 600-601 [aircraft had 18 stops per day, and earned 10 

percent of its revenue, in Nebraska]; NetJets, at p. 49 [aircraft 

had between 13 and 181 arrivals per day, and did five to 13 

percent of its business, in California].) Similar quanta of statespecific evidence are missing here.

Second, JetSuite alternatively contends that any specific 

deficiency in its evidentiary showing is irrelevant because section 

1161, subdivision (b) provides that situs is established once a 
12

single “aircraft . . . makes a landing in the state,” such that their 

jets’ landings in other states establishes situs in those states.

We reject JetSuite’s argument because the “single landing”

situs rule created by section 1161, subdivision (b) applies, by its 

plain language, only to fractionally owned aircraft, and JetSuite 

concedes that its jets are not fractionally owned. Our Legislature 

knows how to create a special definition of situs (as it did for 

fractionally owned aircraft); its decision not to do so for other 

categories of aircraft must be given effect. (See, e.g., People v. 

Tingcungco (2015) 237 Cal.App.4th 249, 257-258 [noting this 

maxim].)

JetSuite nevertheless offers two reasons why the section 

1161, subdivision (b) situs rule for fractionally owned aircraft 

must be extended to reach all aircraft. To begin, JetSuite asserts 

that the form of ownership should not dictate situs. Because our 

Legislature has taken a different view and allowed the default 

due process-based definition of situs to remain in force for all 

non-fractionally owned aircraft (§§ 1154, subd. (c), 1155 & 5362), 

JetSuite is at bottom arguing that our Legislature committed an 

error of constitutional dimension in adopting a specialized 

definition of situs just for fractionally owned aircraft. This is an 

equal protection argument, and one that lacks merit given our 

Legislature’s “suprem[acy] in the field of taxation” (Delaney 

v. Lowery (1944) 25 Cal.2d 561, 568) and its power to 

“permissibly distinguish in favor of a given class” (Haman 

v. County of Humboldt (1973) 8 Cal.3d 922, 925; Sea-Land 

Service, supra, 12 Cal.3d at p. 780 [“equal protection . . . imposes 

no invariable rule of total equality in the exercise of the state’s 

taxing power”]; accord, NetJets, supra, 207 Cal.App.4th at p. 51 

[noting that Legislature can “create[] a new definition of situs for 
13

purposes of taxation” for different categories of aircraft—in that 

case, fractionally owned aircraft].)

Further, JetSuite urges that the “internal consistency” 

doctrine mandates the extension of section 1161, subdivision (b)’s 

situs rule to all aircraft in order for all aircraft to be treated 

consistently. However, this argument misapprehends the 

doctrine. The internal consistency doctrine is used to measure 

whether a jurisdiction’s tax laws impermissibly discriminate 

against commerce from other jurisdictions in violation of the 

dormant commerce clause. (Armco Inc. v. Hardesty (1984) 

467 U.S. 638, 644-645; Container Corp. v. Franchise Tax Bd.

(1983) 463 U.S. 159, 169-170; General Motors Corp. v. City of Los 

Angeles (1995) 35 Cal.App.4th 1736, 1741-1742, 1749-1750.) 

Situs is a function of due process, not the dormant commerce 

clause. Because “the Due Process Clause and the Commerce 

Clause reflect different constitutional concerns” and rest on 

“analytically distinct” considerations (Quill Corp. v. North Dakota

(1992) 504 U.S. 298, 305; MeadWestvaco Corp. v. Illinois Dept. of 

Revenue (2008) 553 U.S. 16, 24 [noting that the two clauses 

“impose distinct but parallel limitations on a State’s power to tax 

out-of-state activities”]), a test from one cannot be imported willy 

nilly to the other.

More broadly, were we to accept JetSuite’s argument, we 

would be converting our Legislature’s statutorily created single 

landing rule for fractionally owned aircraft into a constitutionally 

mandated rule for all aircraft, thereby displacing the well-settled

due process-based rules for assessing situs and in the process 

declaring that 42 other states and six other countries have situs 

of JetSuite’s jets. We will not bless this absurd result.
14

Lastly, JetSuite argues that Utah’s taxation of its aircraft 

in 2013 dictates a finding that Utah had situs over its jets in 

2010. We disagree. The “representative period” for the taxes at 

issue in this case was 2010. (§ 1153; County of Alameda v. State 

Bd. of Equalization (1982) 131 Cal.App.3d 374, 380 

[representative period may be the prior calendar year].) Nothing 

in the record indicates that JetSuite’s activities in 2013 have any 

relevance—let alone any retroactively binding effect—on what its 

activities were, or where they might have established situs, in 

2010. Indeed, JetSuite’s fleet operations had changed drastically 

between 2010 and 2013; by 2013, JetSuite’s fleet had grown from 

six jets to 21. The 2013 evidence was entitled to no weight.

DISPOSITION

The judgment is affirmed. The County is entitled to its 

costs on appeal.

CERTIFIED FOR PUBLICATION.

______________________, J.

HOFFSTADT

We concur:

_________________________, Acting P. J.

ASHMANN-GERST

_________________________, J.*

GOODMAN

 

* Retired judge of the Los Angeles Superior Court, assigned 

by the Chief Justice pursuant to article VI, section 6 of the 

California Constitution.