What priority difference did California staff note between DMV's vehicle-use-tax lien and the Board's own use-tax lien?

Plain-English summary

This internal 1984 memorandum recorded DMV counsel's position that former Vehicle Code section 9802(c) gave DMV's vehicle use-tax and registration enforcement priority over a purchase-money security interest.

Board staff agreed that its own use-tax lien under section 6756 would not outrank that purchase-money interest. The author found the difference surprising and suggested it might result from separate statutory drafting.

The memorandum did not independently verify the Vehicle Code provisions; the author expressly said both office copies of the code were unavailable. DMV counsel planned to defend its asserted priority if the matter reached litigation.

Common questions

Did this memo decide an actual Board case?

No.

Did the author verify DMV's statute?

No.

What difference was noted?

DMV counsel claimed priority over the purchase-money interest, while the Board's own lien was treated as subordinate.

Citations and references

• Former California Vehicle Code section 9802(c) — DMV priority asserted by its counsel
• California Revenue and Taxation Code section 6756 — Board lien priority compared

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/170-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/170-0210.pdf

Original ruling text

State of California

Board of Equalization

170.0210

Memorandum
To:

Collection Files

From:

Donald J. Hennessy

Subject:

Priority of State Tax Liens

Date:

March 27, 1984

REDACTED TEXT, Counsel for the Department of Motor Vehicles, phoned me today and discussed at some length a current enforcement case which they believe will eventually be litigated. The case involves rather expensive vehicles on which registration fees were not paid. The vehicles were used in California but improperly registered in another state. DMV has enforced collection of the registration fees and use tax. A holder of a purchase money security interest has demanded refund of such amounts as violating its purchase money security interest. DMV is taking the position that under Vehicle Code Section 9802(c) use tax has priority over the purchase money security interest. She called to discuss her opinion that, under our own collection statutes for use tax, our liens would not have priority over a purchase money security interest. I told her she was correct that our liens would not have priority and that I was surprised to find out that their lien priorities are greater than ours. While she suspects this contradiction was not deliberate, i.e., that the drafting of their statute by their staff was without knowledge of our priorities, she will recommend that DMV defend its priorities as reasonable given the different functions of the two agencies. I have not been able to check out the DMV statutes as both copies of the Vehicle Code are in use. But, this difference as to priorities as to use tax is rather strange.

DJH:rar
cc:

Mr. Ron Dick – Have you encountered this?