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California Supreme Court Says Cities Can’t Add Extra Hurdles to Tax Refunds

The ruling lets Marathon pursue a state-law refund claim after Carson said the company owed more refinery taxes.

  • On Monday, the California Supreme Court ruled that cities cannot mandate extra local procedures before taxpayers sue for refunds, delivering a procedural victory to Marathon Petroleum in its tax dispute with Carson.
  • The dispute centers on a 2017 voter-approved refinery tax that Carson audited, demanding additional payments from Marathon subsidiary Tesoro, which argued the city improperly taxed business activity occurring in Wilmington.
  • Supported by the Western States Petroleum Association, Marathon argued the Government Claims Act prevents companies from navigating a "Byzantine" claims system; the company operates the Los Angeles Refinery, comprising 27% of California's crude oil capacity.
  • Hours after the ruling, Carson moved to finalize a $370 million settlement with Marathon, while the city council conditionally rescinded a separate measure charging refineries up to $1 per barrel.
  • The core dispute over tax attribution remains unresolved, even as California drivers face the nation's highest gasoline prices, partly driven by global crude oil costs.
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Learn what the California Supreme Court ruled on tax refunds and why the ruling favors Marathon against Carson

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California supreme court says cities can’t add extra hurdles to tax refunds

This story was originally published by CalMatters. Sign up for their newsletters. California cities can’t require taxpayers to navigate extra local procedures before seeking a tax refund in court, the California Supreme Court ruled Monday in a long-running lawsuit involving Marathon Petroleum, which operates the state’s largest refinery. The decision gives Marathon a procedural victory […]

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Davis Vanguard broke the news on Monday, August 10, 2026.
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