The owner of a business who claims compensation under this article shall make available to the court, and the court shall, upon such terms and conditions as will preserve their confidentiality, make available to the plaintiff, the state tax returns of the business for audit for confidential use solely for the purpose of determining the amount of compensation under this article. Nothing in this section affects any right a party may otherwise have to discovery or to require the production of documents, papers, books, and accounts.
§ 1263.520.State Tax Returns Made Available to Plaintiff
Title 7. Eminent Domain Law · Chapter 9. Compensation · Article 6. Compensation for Loss of Goodwill · Enacted 1975 · no amendments on record · Last verified July 29, 2026
In one sentenceSection 1263.520 requires a business owner claiming lost-goodwill compensation to make the business's state tax returns available to the court and, under confidentiality safeguards, to the condemning plaintiff, solely to help determine the goodwill award, without limiting either side's ordinary discovery rights.
Full Text of § 1263.520
Plain-English Summary
Proving lost goodwill often means opening the books. This section requires an owner who claims compensation for lost goodwill to make the business's state tax returns available to the court. The court then makes those returns available to the plaintiff too, but only on terms and conditions that preserve their confidentiality, and only so the plaintiff can use them to help determine the amount of compensation under this article.
The section is narrow by design. It does not create a special new discovery tool or take anything away from the ordinary rules -- whatever right a party already has to discovery, or to demand production of documents, papers, books, and accounts, stays exactly as it was. This section guarantees that tax returns specifically will be available for the goodwill audit, confidentiality intact.
Frequently Asked Questions
Does claiming a goodwill loss require turning over the business's tax returns?
Yes -- the owner must make the business's state tax returns available to the court for audit.
Are the tax returns handed over to the plaintiff without any protection?
No. The court makes them available to the plaintiff only on terms and conditions that preserve their confidentiality.
Does this section replace or expand normal discovery rules?
No. Section 1263.520 says nothing in it affects any right a party otherwise has to discovery or to require production of documents, papers, books, and accounts.
Amendment History
Added by Stats. 1975, Ch. 1275.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 29, 2026.
· Official source
Also known as: tax returns goodwill claim eminent domain californiabusiness goodwill discovery condemnation california