972.407.6580 info@napta.com

National Association of Property Tax Attorneys

Charles J. Moll III

Partner Winston & Strawn LLP
Work 101 California Street San Francisco California 94111 Work Phone: 415-591-1582 Work Fax: 415-591-1582 Website: Visit our website


NAPTA Charter Member

Charles Moll is a partner in the firm’s tax group who leads the firm’s nationwide state and local tax practice.
Mr. Moll’s practice primarily involves the resolution of tax controversies. He regularly appears before various California tax authorities, such as the State Board of Equalization and the Franchise Tax Board, and local authorities such as assessors and assessment appeals boards, on a wide variety of taxes. He has litigated at all levels of California’s courts, the U.S. Tax Court, and the U.S. Supreme Court. Mr. Moll’s practice includes tax matters in other states, as well as federal tax controversies, including representation of clients in federal courts and at appellate hearings before the Internal Revenue Service.


Recent Cases:

Mr. Moll’s representative matters include the following:
· Appeared as counsel of record and prevailed in the U.S. Supreme Court in Hunt-Wesson v. Franchise Tax Board, 528 U.S. 458 (2000). The Supreme Court unanimously struck down California’s interest offset provision as being unconstitutional.
· Represented the taxpayer in City of Modesto v. National Med, Inc., et al., 128 Cal. App. 4th 518 (2005). The Court struck down the City’s unapportioned business license tax ordinance as unconstitutional, and refused to allow retroactive taxation.
· Prevailed against the California Franchise Tax Board in a business/nonbusiness income case before the State Board of Equalization, resulting in a rare published decision in Appeal of Consolidated Freightways, 2000 Cal. Tax LEXIS 402.
· Successfully represented the taxpayer in Crocker Nat’l Bank v. San Francisco, 49 Cal.3d 881 (1990), a seminal property tax case in the California Supreme Court.

Speeches & Publications:

Mr. Moll’s recent speaking engagements include the West Coast Biotech Tax Conference, Newport Beach, Calif.; TEI, Santa Clara, Calif.; speaking and teaching on corporate income and franchise taxation, Summer Institute in Taxation, New York University, New York; panelist, “Thinking Outside the Box – Creative Applications of Sales and Use Tax Exemptions,” the 14th Annual Paul J. Hartman SALT Forum, Nashville, Tenn.; and panelist, Chief Counsel’s Round Table, Annual Meeting of the California Tax Bars, La Jolla, Calif.
EHP Glendale v. County of Los Angeles: Intangibles in Property Tax Assessment (California)

By Charles J. Moll III, Troy Van Dongen & Bradley R. Marsh

In a controversial recent decision, EHP Glendale v. County of Los Angeles, (2011) 193 Cal. App. 4th 262, the California Court of Appeal held that the trial court erred in granting summary judgment in favor of the taxpayer in a property tax appeal. The property at issue was a hotel which included real property, personal property, and certain intangible assets and rights (e.g., the franchise agreement with Hilton and the management contract). The taxpayer purchased the hotel for $79.8 million, which is the amount that was originally enrolled by the assessor. Contending that the market value of the property should be reduced, the taxpayer filed an assessment appeal and argued “that the assessment impermissibly captured the value of nontaxable intangible assets.” Id. at 381.

The taxpayer’s expert appraiser testified that after valuing the property using all three recognized approaches to value (i.e., sales comparison, income capitalization, and cost), his final opinion of value of the going concern hotel business was $77.3 million. From this amount, however, he deducted the claimed total value for intangible assets and rights worth $14.6 million. Thus, the taxable value of the property, according to the taxpayer’s appraiser, was $62.6 million.

The assessor’s expert testified that he used the income capitalization approach, and after projecting the hotel’s income from all sources, deducted appropriate expenses to arrive at a net operating income for the hotel. The deductions included Hilton’s management and franchise fees, labor costs and marketing expenses. The assessor contended that the taxable value of the property was $73.3 million. The board adopted the assessor’s property valuation.

The taxpayer challenged the board’s decision in superior court and brought a motion for summary judgment, contending that “the assessor’s valuation, adopted by the Board, relied on an invalid appraisal methodology that did not fully identify value and exclude intangible assets from the assessed property as required by California law.” Id. at 268. In support of its motion, the taxpayer presented “only fragmentary excerpts of the administrative record.” Id. The trial court granted the motion for summary judgment, holding that the board had erred as a matter of law in adopting the assessor’s methodology because it failed to fully exclude intangible assets from the property assessment.

The Court of Appeal reversed on procedural grounds and held “that the trial court erred in granting summary judgment on an incomplete record.” Id. at 264. Then, in dicta, contrary to past precedent and Senate Bill 657, which introduced California Revenue and Taxation Code section 110(d)(1) (“The value of intangible assets and rights relating to the going concern value of a business using taxable property shall not enhance or be reflected in the value of taxable property.”), the Court of Appeal stated that the issue of whether the assessor improperly applied the income approach by not deducting intangibles presented a question of fact, rather than a question of law.