Justia Tax Law Opinion Summaries

This appeal challenged the validity of a possessory interest tax imposed by the County of Riverside, California (the county) upon lessees of federally owned land set aside for the Agua Caliente Band of Cahuilla Indians (Agua Caliente tribe) or its members. A subset of the more than 450 plaintiffs in this appeal also challenged the validity of voter-approved taxes funding the Desert Water Agency, Coachella Valley Water District, Palm Springs Unified School District, Palo Verde School District, and Desert Community College District. A small minority of the plaintiffs claimed to hold a possessory interest in land set aside for the Colorado River Indian tribe (CRIT), but they argued the challenged taxes were invalid for the same reasons asserted by the other plaintiffs. A trial court upheld the validity of the challenged taxes and plaintiffs’ appeal, arguing the challenged taxes were preempted by federal law. The question of whether the county could impose a possessory interest tax on lessees of land set aside for the Agua Caliente tribe or its members was the subject of repeated litigation in both federal and state courts, and the validity of the county’s possessory interest tax in this context has been repeatedly upheld. During the pendency of this appeal, the Court of Appeal issued its decision in Herpel v. County of Riverside, 45 Cal.App.5th 96 (2020), again upholding the validity of the county’s possessory interest tax under almost identical circumstances as those presented here. Although plaintiffs claim that the Herpel decision was not controlling because it did not consider many of the arguments presented here, the Court concluded the facts and arguments presented in this case did not materially differ from those already considered in Herpel, and plaintiffs did not present any persuasive reason for the Court to depart from that recent decision. View "Albrecht v. County of Riverside" on Justia Law

Alameda County Waste Management Authority sought records from three out-of-county landfills (Waste Connections) that disposed of waste originating in Alameda County. The Integrated Waste Management Act, Public Resources Code sections 40000-49260, permits local government entities to inspect and copy specified records kept by landfills concerning waste received at such landfills originating in the government’s geographic jurisdiction “for the purposes of” verifying reports made by the landfills on “disposal tonnages by jurisdiction of origin” and “as necessary to enforce the collection of local fees.” Waste Connections refused to permit the inspections, contending that the Authority had not shown inspection of the records was “necessary” to enforce its fee ordinance. The Authority attached a copy of its fee ordinance and explained that the fee depends on where tonnage originated, the type and amount of waste, and the party responsible for transporting the waste to the landfill, facts that are documented in landfill weight tags of the kind the statute allows government entities to inspect.The superior court compelled Waste Connections to allow the inspection. The court of appeal affirmed. The “as necessary” language of section 41821.5(g)(2)'s inspection provision requires neither a factual showing nor a factual determination. View "Alameda County Waste Management Authority v. Waste Connections US, Inc." on Justia Law

Proposition 13 and Proposition 218 amended the California Constitution to require that any special tax adopted by a local government entity take effect only if approved by a two-thirds vote of the electorate. The court of appeal recently interpreted these constitutional provisions “as coexisting with, not displacing, the people’s power to enact initiatives by majority vote” and held that a measure placed on the ballot as a local citizens’ initiative requires a majority, not a supermajority, vote to pass.Sixty percent of San Franciscans voting on Proposition G— an initiative entitled “Parcel Tax for San Francisco Unified School District”—approved the measure. San Francisco filed suit to establish that Proposition G was valid. The complaint against “All Persons Interested” was answered by Nowak, who argued that Proposition G is invalid because it failed to garner the two-thirds vote required by Proposition 13 and Proposition 218. Nowak also contended that a provision of Proposition 218 unique to parcel taxes, (art. XIII D, 3(a)), requires a two-thirds vote of the electorate to enact Proposition G. Nowak sought to distinguish the earlier decisions on the grounds that Proposition G was conceived and promoted by local government officials and was not a valid citizens’ initiative. The court of appeal rejected all of Nowak’s arguments, standing by its earlier decisions. View "City & County of San Francisco v. All Persons Interested in Matter of Prop. G" on Justia Law

Verizon California Inc.’s (Verizon) petitioned the California State Board of Equalization’s (Board) to reduce its assessments for the tax years 2008 through 2012. Verizon paid the taxes levied by the counties for each year based on the Board-assessed values set forth in its petitions. Verizon then joined with Board staff to seek approval from the Board of joint recommendations to lower the assessed values of its property set forth in its petitions. The Board approved the joint recommendations. Verizon then filed actions for refunds for the years 2008 through 2012 arguing that the Board should have adopted the valuations proposed in its petitions. The trial court consolidated the actions. The Board moved for summary adjudication of the claims on the ground the court lacked jurisdiction because in approving the Verizon/Board staff recommendations for reduced valuations Verizon failed to exhaust its administrative remedies with respect to the valuations it claimed in its petitions. The trial court granted the motion for summary adjudication of the consolidated actions based on the Board’s approvals of the parties’ joint recommendations for a reduction in assessed valuations. On this basis, the trial court concluded: “Because of the mutually agreed recommendation[s] on value, no disputed issues were presented to the Board for [tax years] 2008 through 2012. In each of those five years, the Board adopted the revised value that had been jointly recommended by Verizon and [the Board] staff, reducing Verizon’s tax basis by over $1.1 billion in the aggregate. [¶] . . .Verizon cannot ask the Board to adopt a jointly presented reduction in value, receive the agreed reduction, and then turn around and sue for a lower value than it asked the Board to adopt.” Verizon timely appealed the trial court’s decision, arguing again that the Board should have adopted the valuations it proposed in its petitions to the Board to reassess its property. The Court of Appeal determined the statutory ground of the actions required a “dispute” regarding the Board’s assessments of the property. Finding none, the Court affirmed the trial court’s judgment. View "Verizon California v. Board of Equalization" on Justia Law

Humboldt County Ballot Measure S proposed a tax on commercial cultivators of marijuana and was approved by the voters. The tax became operative on January 1, 2017. Measure S allows the Board of Supervisors to amend the law or approve enforcement regulations promulgated by the administrative officer if the action “does not result in an increase in the amount of the tax or broaden the scope of the tax.” The Supervisors amended Measure S in June 2017, and again in April 2018, making the tax applicable to all persons with a cultivation permit, as opposed to just those engaged in cultivation; redefining “cultivation area”; and changing the time when the taxes start to accrue.Silva owns property in Humboldt County. No one cultivated cannabis on the property in 2017. The County sent her an invoice of $40,000 in commercial cannabis cultivation taxes under Measure S for the year 2017–2018. Silva paid the invoice. The County sent an invoice of $54,025 for the year 2018–2019. Silva again paid the invoice.A 2018 petition argued that the amendments impermissibly broadened Measure S. The court of appeal affirmed a ruling in Silva's favor. The trial court was not procedurally barred from considering the challenge to the Board’s amendments. The doctrine of exhaustion of administrative remedies does not apply and the amendments expanded, rather than just clarifying, Measure S. View "Silva v. Humboldt County" on Justia Law

The tax at issue in this case related to the State Water Project ("SWP"): California’s vast system of storage and conveyance facilities designed to provide water to its millions of residents and farmers. In 2013, the Coachella Valley Water District (the water district) passed a resolution adopting a two-cent increase to the rate of its ad valorem property tax, which the water district levies annually to satisfy its contractual financial obligations to the SWP. In 2018, Randall Roberts filed a lawsuit against the water district and the County of Riverside, seeking to invalidate the tax under the Burns-Porter Act of 1960, and the California Constitution, and to obtain a refund. The water district demurred, arguing the entire action was time-barred because Roberts was required under the validation statutes to present his claims in a “reverse validation action” no later than 60 days after the water district adopted the tax, which it does annually by resolution. The trial court concluded the validation statutes did not apply to the SWP tax and overruled the demurrer. The Court of Appeal concurred with the water district that the validation statutes applied to the SWP tax by operation of the County Water District Law, which made the validation statutes applicable to any action to determine the validity of a county water district's "assessment" (and defined a property tax as an "assessment"). View "Coachella Valley Water Dist. v. Super. Ct." on Justia Law

Ashford San Francisco owns the 2nd Street property. In 2013, a majority ownership interest in Ashford San Francisco was acquired by Ashford Hospitality. The transfer resulted in a change in ownership of the property, which the city determined triggered the imposition of the transfer tax. Ashford paid $3,348,025 in transfer taxes based upon the $133,920,700 self-reported value of the property, then filed an administrative claim for a refund. The transfer tax has five tiered (graduated) tax rates.When the city did not timely act, Ashford filed suit. seeking a refund, alleging that the transfer tax “imposes different tax rates on taxpayers for performing the same exact function” and arbitrarily classifies property transfer instruments for the imposition of a varying rate of taxation, solely by reference to the amount of the consideration in the transactions in violation of the Equal Protection Clause.The court of appeal affirmed a judgment in favor of the city. The city rationally chose to treat the sale or transfer of a higher-valued property differently from the sale of a lower-valued property; the transfer tax “taxes all transfers of the same consideration or value equally.” The court noted the city’s justifications: the owner’s ability to pay and that time and costs associated with the city’s audits for the self-reported transfer tax may increase depending on the value of the property. View "Ashford Hospitality v. City and County of San Francisco" on Justia Law

San Rafael voters approved by a two-thirds vote a Paramedic Services Special Tax, imposing an annual special tax up to a maximum of 14 cents per square foot on all nonresidential structures in the city to fund paramedic services. In 2015-2016, the city determined that the Assessor had been inadvertently omitted certain properties from the Paramedic Tax assessment. City officials rectified this oversight prospectively and sought to collect a portion of the Tax that had gone unpaid. One property owner that received notice of the levy was Valley Baptist, a nonprofit religious organization that operates a church on property within city boundaries. The city requested payment of $13,644.Valley Baptist filed suit, challenging the constitutionality of the Tax as applied to a place of worship. Valley Baptist argued that it is exempted from payment of all property taxes under article XIII, section 3(f) of the California Constitution, including the Paramedic Tax. Reversing the trial court, the court of appeal held that the religious exemption does not extend to non-ad valorem special property taxes like the Paramedic Tax. The constitutional articles added by Propositions 13 and 218 do not evince an intent by the electorate to extend the scope of article XIII exemptions to special property taxes. View "Valley Baptist Church v. City of San Rafael" on Justia Law

After paying the taxes due under escape assessments, LA Live brought a tax refund action against the County seeking a refund of those taxes. LA Live claimed that the Assessor failed to comply with the procedural requirements of Revenue and Taxation Code section 531.8. The trial court entered judgment for the County, finding that the Assessor's failure to wait 10 days before enrolling the escape assessments did not render them void, and LA Live had failed to exhaust its administrative remedies before pursuing the present action.The Court of Appeal affirmed and concluded that the trial court correctly concluded that LA Live's claim is not reviewable on the merits because LA Live did not exhaust its administrative remedies. The court explained that, by statute, a taxpayer is required to file administrative requests for reassessment and refund before filing a refund action in court. Furthermore, the administrative exhaustion requirement is jurisdictional unless the assessment is a nullity as a matter of law. In this case, the assessment was not legally null: Even if the Assessor failed to follow the statutory procedure set out in section 531.8, that failure did not render the assessment a nullity because the real property at issue was not tax exempt, nonexistent, or outside the County's jurisdiction. View "LA Live Properties, LLC v. County of Los Angeles" on Justia Law

After the passage of Proposition 218, Sacramento voters approved a requirement that city enterprises providing water, sewer, storm drainage, and solid waste services pay a total tax of 11% of their gross revenues from user fees and charges. Nineteen years later, plaintiff-respondent Russell Wyatt brought a petition for writ of mandate and complaint for declaratory relief against the City challenging its fees and charges for utility services under article XIII D, section 6, subdivision (b) of the California Constitution (added by Prop. 218, as approved by voters, Gen. Elec. (Nov. 5, 1996)). It was undisputed that the City set these fees and charges at rates sufficient to fund the payment of the tax to its general fund. The trial court issued a writ of mandate and judgment in Wyatt’s favor. The Court of Appeal reversed the judgment and directed the trial court to vacate its writ of mandate. By approving the tax in 1998, Sacramento voters increased the cost of providing utility services, rendering those costs recoverable as part of their utility rates and the subsequent transfer of funds permissible under article XIII D. View "Wyatt v. City of Sacramento" on Justia Law