Navistar International Transportation Corp. v. State Board of Equalization

BAXTER, J., Concurring and Dissenting.

I concur in the majority’s holding that the sale of documents (i.e., drawings, designs, manuals, and procedures) by Navistar International Transportation Corporation to Caterpillar Inc. is subject to the sales tax. I respectfully dissent, however, from the majority’s further holding that the computer programs are subject to sales tax.

As the majority acknowledges, Revenue and Taxation Code section 6010.9 states that the sale or transfer of a “custom computer program” is not *884subject to sales tax. Section 6010.9 categorizes computer programs into two types: custom programs and “canned” programs. For purposes of this statute, there is no other type. A program is necessarily either custom or canned. A canned program is defined as being a “. . . prewritten program which is held or existing for general or repeated sale . . . .” The majority does not purport to characterize the programs at issue in this case as being canned. Thus, they are custom programs by definition and should be exempt from sales taxation. The majority, however, creates a third category with no statutory basis: a non-canned—that is, custom—program that is taxable. I cannot concur in this judicial rewriting of the statute.