One of the newly proposed bills is Bill 1199 by Rep. Mike Gipson (D-Carson), which charges an annual excise tax for the privilege of renting or renting out qualifying property, the Globe reported on Friday.
Our first reaction was that this tax is a deliberate effort to undermine the will of the electorate. In November, California voters defeated Proposition 15, the “Commercial and Industrial Property Tax for Education and Community Funding Initiative (2020),” known as the “Split Roll” property tax. Prop. 15 would have changed the Constitution and changed the current tax law by taxing commercial and industrial property at market value, rather than the current method of taxing purchase price with annual increases of 2% or the rate of inflation, whichever is lower . Residential real estate would continue to be valued on the basis of the purchase price.
AB 1199 can be a property tax disguised as a rental property excise tax increase that includes rental of residential and commercial properties. A trade license tax could be just as egregious AB 1199.
“As part of the split-roll election initiative to divide residential and commercial / industrial real estate, proponents of the tax hike admitted that it will redefine commercial and industrial structures including barns, egg food processing structures, broccoli, citrus fruits, lettuce, wineries , Almonds and righteous about everything that grows in the ground and what the Californians and the rest of the country eat, ”reported the Globe in October.
Jon Coupal, President of the Howard Jarvis Taxpayers Association. (Photo: HJTA youtube)
The Globe spoke to Jon Coupal, President of the Howard Jarvis Taxpayers Association, and Scott Kauffman, HJTA Legislative Director. HJTA is the father of the legendary Proposal 13, which “Under Proposal 13 in 1978 defined the specificity of the property tax initiative as: Land, Furnishings, Improvements” and limited the taxation of the purchase price with annual increases of 1% for residential properties and 2% for properties Commercial real estate.
Coupal said that AB 1199 not only rejects the will of voters who defeated the split-roll initiative, but also “how a business license tax goes and how a business license tax speaks”.
“Local governments will not like this,” he said. “A business license tax is the responsibility of the local government.”
“As with gun control, it says we first register all guns and then take them away,” said Coupal, noting that the bill could implement incrementalism.
This bill could also constitute a violation of the state constitution. “A provision in the state constitution states that the state may not impose local taxes on local governments for state purposes,” said Coupal.
Coupal said HJTA was part of a lawsuit brought by CITY OF OAKLAND against RICHARD DIGRE, in which the appellate court found that the city was attempting to impose an excise duty. The court ruled that the tax was unconstitutional and was a property tax disguised as an excise tax. Defendant Richard Digre, Oakland’s finance director, refused to enforce the tax even though voters approved Measure M on the grounds that the tax was against The constitutional rule violates that all real estate must be taxed according to value.
Coupal also noted that AB 1199 appears to be intended for residential real estate as well, with the bill containing violations of the code that mostly occur in residential real estate.
“Democrats are striving for their feverish base,” said Coupal, reckoning that this will not be a popular bill among the millions of injured companies and workers suffering.
Scott Kauffman, the HJTA’s legislative director, said there were 172 proposed tax laws so far. He noted that some are one-year tax credits due to statewide corporate franchise due to the governor’s statewide COVID lockdown. But the bulk of the bills are tax hike proposals for businesses in the state, regardless of what they’re called.