A judge has ordered a California agency to return about $800,000 in state sales taxes he said were wrongfully imposed on singer-songwriter Joni Mitchell and the rock group America.
A lawyer for Mitchell and America said the decision by Superior Court Judge Aurelio Munoz could open the way for recoveries by other recording artists.
The state had assessed the 6 percent sales tax on the theory that artists "sell" their master recordings to record companies in exchange for royalties. The state called the master recording "tangible personal property."
Lawyers for the artists had argued that they were paid not for their master recordings but rather for personal services and are thus not subject to a sales tax.
The state Board of Equalization began applying the sales tax to recording artists in the early 1970s.
State legislation prohibited the practice in regard to records issued after Jan. 1, 1976, but the board continued to tax artists on recordings made before that date.
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