Sunday, August 30, 2009

A Charge To Collect A Tax Is, Guess What? (A Tax)

Ever since the enactment of Prop. 13 there have been dozens of cases demarcating the boundary line between taxes, which at the local level now require voter approval, and fees, which sometimes do not require such approval (even under Prop. 218). The latest battle in this saga is Weisblat v. City of San Diego (here). There the City tried to impose a fee to cover the costs of imposing a tax on renters of real property. Not surprisingly, the court held that the charge was a tax, not a fee, since it did not cover the cost of regulation or the cost of providing a service to these property owners. Accordingly, the case largely restates settled law, and is far from the sweeping victory that it has been portrayed as by anti-tax groups. In fact, the only novel thing about the case is its holding that the tax was a "general tax" under Prop. 218, rather than a "special tax," even though it was intended to cover specific costs. That holding should give local government a chance to levy more general taxes that require only a majority vote.

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