Ezel / Tax Rulings / CA

Did California treat a federal savings and loan association as a bank for the constitutional in-lieu provision and Sales and Use Tax Ruling 51?

Short answer No. Tax counsel said a federal savings and loan association was not a bank within the cited constitutional in-lieu provision, so Ruling 51 did not apply.
State
CA
Ruling
Annotation 135.0100
Tax type
Sales and Use Tax
Issued
1950-01-12
Issued by
California State Board of Equalization
Requested by
A requester asking whether Sales and Use Tax Ruling 51 applied to federal savings and loan associations
Topics
banks financial institutions
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1950. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1950
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This short 1950 tax-counsel opinion addresses a historical constitutional provision and Sales and Use Tax Ruling 51. It does not explain Ruling 51 or broader present-day treatment of financial institutions. Constitutional and statutory law may have changed. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

A requester asked whether Sales and Use Tax Ruling 51 applied to federal savings and loan associations.

Tax counsel answered no. The Board did not regard a federal savings and loan association as a bank within the “in lieu” provision of article XIII, section 16 of the California Constitution. On that basis, Ruling 51 did not apply to such an association.

The brief source does not describe Ruling 51's other requirements or state how any later law treats these institutions.

Common questions

Did the opinion classify a federal savings and loan association as a bank?

No, not for the cited constitutional in-lieu provision.

What was the consequence of that classification?

Sales and Use Tax Ruling 51 did not apply to the federal savings and loan association.

Does the letter establish current tax treatment?

No. It records a narrow conclusion under a constitutional provision and ruling cited in 1950.

Citations and references

  • California Constitution article XIII, section 16 (the “in lieu” provision, as cited)
  • California Sales and Use Tax Ruling 51 (application rejected for federal savings and loan associations, as cited)

Source

Original ruling text

135.0100
STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

January 12, 1950
REDACTED TEXT
Attention:

REDACTED TEXT

Gentlemen:
This is in reply to your letter of November 29 in which you inquire as to the application of
Sales and Use Tax Ruling 51 to federal savings and loan associations.
You are advised that we do not regard a federal savings and loan association as a bank
within the meaning of the “in lieu” provision of Article XIII, Section 16 of the California State
Constitution. Accordingly, Ruling 51 does not apply to a federal savings and loan association.
Very truly yours,
E. H. Stetson
Tax Counsel
EHS/WAP/hb

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