Opinion ID: 1386091
Heading Depth: 4
Heading Rank: 3

Heading: Effect of Pertinent Regulation

Text: For the foregoing reasons we also cannot accept plaintiff's view of the effect of section 462, subdivision (k)(4) of title 18 of the California Code of Regulations. That administrative rule provides: Sale and leaseback. A sale of real property, coupled with a leaseback which is not reserved to the transferor by the terms of the sale instrument, constitutes a change in ownership of such property; provided however, a sale and leaseback transaction shall be rebuttably presumed to be a non-reappraisable financing transaction upon a proper written showing [that the transaction is a financing for income-tax purposes]. As plaintiff was constrained to concede at oral argument, an administrative rule that exceeds the Legislature's grant of authority as expressed in section 60 et seq. is without effect and may not be enforced. (See Ralphs Grocery Co. v. Reimel (1968) 69 Cal.2d 172, 176, fn. 3 [70 Cal. Rptr. 407, 444 P.2d 79]; University Ford Chrysler-Plymouth, Inc. v. New Motor Vehicle Bd. (1986) 179 Cal. App.3d 796, 805 [224 Cal. Rptr. 908].) Therefore, to the extent the regulation conflicts with the Constitution and the Revenue and Taxation Code as construed in this opinion, well-settled principles of administrative law proscribe its enforcement. [6] The judgment of the Court of Appeal is reversed with directions to order the trial court to enter judgment for defendants.