Filed 10/10/17
                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                         DIVISION TWO


JETSUITE, INC.,                         B279273

      Plaintiff and Appellant,          (Los Angeles County
                                        Super. Ct. No. BC559245)
      v.

COUNTY OF LOS ANGELES,

      Defendant and Respondent.


     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.

                             ******
       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.




                                 2
       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.




                                 3
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.




                                  4
       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




                                  5
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.)




                                  6
       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.




                                 7
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




                                  8
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].)




                                  9
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.




                                 10
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 state-
specific 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




                                11
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




                                 12
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.




                                13
       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.




                                 14
