What law governs personal taxes?

Proposition 218, known as the “Right to Vote on Taxes Act,” in 1996. (Jacks v. City of Santa Barbara (2017) 3 Cal.5th 248, 259.)

Proposition 218 added Article XIII C to the Constitution, imposing voter approval requirements for general and special taxes. (Id.) This ensured that charter jurisdictions (which were not clearly bound by Proposition 62) were subject to these requirements. (Id.)

In addition, Proposition 218 responded to Proposition 13’s failure to address traditional benefit assessments, as subsequently recognized by the California courts. (Id.) To that end, it added Article XIII D to the Constitution, which imposes certain substantive and procedural restrictions on taxes, assessments, fees, and charges “assessed by any agency upon any parcel of property or upon any person as an incident of property ownership.” (Cal. Const., art. XIII D, Sec. 3(a).) Among other things, article XIII D instructs that the amount of a “fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel.” (Id., citing Sec. 6(b)(3).) “Article XIII D sets forth procedures, requirements and voter approval mechanisms for local government assessments, fees and charges.” (Howard Jarvis Taxpayers Ass’n v. City of Roseville (2002) 97 Cal.App.4th 637, 640.)

“Most recently, in 2010... state voters approved Proposition 26.” (Jacks v. City of Santa Barbara, supra, 3 Cal.5th at 260.) Proposition 26 “further expanded the reach of article XIII C’s voter approval requirement by broadening the definition of ‘tax’ to include ‘any levy, charge, or exaction of any kind imposed by a local government.’ (Cal. Const., art. XIII C, Sec. 1(e).)” (City of San Buenaventura v. United Water Conservation Dist.(2017) 3 Cal.5th 1191, 1200.)

“The definition contains numerous exceptions for certain types of exactions, including for ‘property-related fees imposed in accordance with the provisions of Article XIII D’ (Id., citing Sec. 1(e)(7)), as well as for charges for ‘a specific benefit conferred or privilege granted,’ or ‘a specific government service or product’ that is provided[] ‘directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government’” (Id., citing Sec. 1(e)(1) & (2)). “To fall within one of these exemptions, the amount of the charge may be ‘no more than necessary to cover the reasonable costs of the governmental activity,’ and ‘the manner in which those costs are allocated to a payor’ must “bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.” (Id., citing Sec. 1(e).)

Interpretation of Tax Ordinances

“A city ordinance is the equivalent of a statute such that rules of statutory construction and interpretation apply.” (Howard Jarvis Taxpayers Assn. v. County of Orange (2003) 110 Cal.App.4th 1375, 1388; see Castaneda v. Holcomb (1981) 114 Cal.App.3d 939, 939–942.)

Useful Rulings on Personal Tax Law

Recent Rulings on Personal Tax Law

PARADA VS CITY OF RIVERSIDE

Proposition 218 did not define “tax.” That omission was cured when article XIII C, section 1, was amended by the passage of Proposition 26 in 2010. Proposition 26 added subdivision (e) to that section. Subdivision (e) broadly defines “‘tax’ to mean any levy, charge, or exaction of any kind imposed by a local government . . . .” (Cal. Const., art. XIII C, § 1, subd. (e).) However, the definition goes on to state seven exceptions. A charge that satisfies an exception is, by definition, not a tax.

  • Hearing

    Jun 05, 2020

RUSSELL WYATT VS. CITY OF SACRAMENTO

Petitioner argues a 3.9 multiplier is appropriate because counsel took the matter on a contingent basis, and the “issues raised in this case are complex and required attorneys with substantial expertise in Proposition 218 matters.” (MPAs, p. 19.) Respondent argues the case was neither novel or complex and was decided as a “single motion on briefs and oral argument.” (Oppo, p. 17.) Respondent further argues the contingent risk was low, unlike the class-action matters Petitioner cites.

  • Hearing

    Mar 13, 2020

MARKS VS CITY OF SAN DIEGO [E-FILE]

In 1997, Proposition 218 took effect as Articles XIII C and XIII D of the California Constitution. Proposition 218 required that the defendant "conduct a public hearing upon the proposed fee or charge" after providing notice of the proposed change. Cal. Const. Art. XIII D § 6(a)(2).

  • Hearing

    Feb 26, 2020

  • Type

    Other

  • Sub Type

    Intellectual Property

DIANA LEJINS, ET AL. VS CITY OF LONG BEACH

Under Proposition 218, all valid assessments must both clear the substantive hurdles in article XIIID, section 4, subdivision (a) and be approved by a weighted majority of owners under section 4, subdivisions (c), (d), and (e).” Id. at 449 (emphasis added and citation omitted). See also Howard Jarvis Taxpayers Ass’n. v.

  • Hearing

    Jan 02, 2020

STATE OF CALIFORNIA DEPARTMENT OF FINANCE VS. COMMISSION ON STATE MANDATES

(San Diego Gas & 13 In a footnote, Permittees state they will discuss the impact of Proposition 26 on this case. (Opening at 13, fn.4.) They fail to meaningfully do so. On pages 17 and 18 of the opening brief, they state Sinclair Paint was “largely superseded” by, or “limited” by, Proposition 26, but they do not explain or discuss what Proposition 26 actually did or said, or how it effects this case.

  • Hearing

    Dec 06, 2019

STATE OF CALIFORNIA DEPARTMENT OF FINANCE VS. COMMISSION ON STATE MANDATES

Permittees state they will discuss the impact of Proposition 26 on this case. (Opening at 13, fh.4.) They fail to meaningfully do so. On pages 17 and 18 of the opening brief, they state Sinclair Paint was "largely superseded" by, or "limited" by, Proposition 26, but they do not explain or discuss what Proposition 26 actually did or said, or how it effects this case.

  • Hearing

    Dec 06, 2019

MARK COZIAHR VS OTAY WATER DISTRICT [E-FILE]

Plaintiffs were not required to participate in the Proposition 218 hearing. The class period shall be one year prior to Patz filing his administrative claim. Accordingly, plaintiff's motion is granted.

  • Hearing

    Dec 05, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

PLATA, ET AL. V. CITY OF SAN JOSE

218.

  • Hearing

    Nov 22, 2019

PLATA, ET AL. V. CITY OF SAN JOSE

City 14 of San Jose, Santa Clara County Superior Court No. 2014-1-CV-258879 (consolidated 15 with case no. 2016-1-CV-294032); 16 (3) The text of Proposition 218, which is now Article XIII D of the California State 17 Constitution; 18 (4) Excerpts from the November 5, 1996, California Ballot Pamphlet prepared by the 19 California Secretary of State, which includes the text of Proposition 218 and ballot 20 materials that were presented to voters on Proposition 218; and 21 (5) The Court’s Statement of Decision

  • Hearing

    Nov 02, 2019

PLATA, ET AL. V. CITY OF SAN JOSE (CONSOLIDATED ACTION) (LEAD CASE)

The only portion of Plaintiffs’ claims on which 16 they achieved any measure of success concerned Defendant’s tiered rates, which the Court found 17 were in violation of Proposition 218. (Statement of Decision and Judgment (“SOD”), p. 51:19- 18 22.) Even with regard to the tiered rates, however, the Court did not award any relief and, in 19 fact, decertified the class.

  • Hearing

    Nov 02, 2019

MARKS VS CITY OF SAN DIEGO [E-FILE]

218, the California Constitution, and California statutes, codes, and other applicable law."

  • Hearing

    Sep 20, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

MARKS VS CITY OF SAN DIEGO [E-FILE]

218, the California Constitution, and California statutes, codes, and other applicable law."

  • Hearing

    Sep 20, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

RAJA DEVELOPMENT CO., INC., ET AL. V. NAPA SANITARY DISTRICT

If defendant is referring to Article XIII D, section 6, subdivision (c), then it would appear that allegations relating to Proposition 218 may be irrelevant and improper as “sewer, water, and refuse collection services” are exempted from the voting requirement. (Cal. Const., art. XIII D, § 6, subd. (c) [“Voter Approval for New or Increased Fees and Charges.

  • Hearing

    Aug 23, 2019

ROLLAND JACKS V. CITY OF SANTA BARBARA

In 2013, based upon its understanding of the law as it then existed, this Court determined that the surcharge was not a tax and did not violate Proposition 218. In 2017, the California Supreme Court issued its ruling in Jacks. That ruling provided a new rule for decision to determine whether franchise fees are or are not taxes subject to Proposition 218’s vote requirements.

  • Hearing

    Aug 13, 2019

MARKS VS CITY OF SAN DIEGO [E-FILE]

218, the California Constitution, and California statutes, codes, and other applicable law."

  • Hearing

    Jul 19, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

MARKS VS CITY OF SAN DIEGO [E-FILE]

218, the California Constitution, and California statutes, codes, and other applicable law."

  • Hearing

    Jul 19, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

CITY OF SAN DIEGO VS. CALIFORNIA STATE WATER RESOURCES CONTROL BOARD

Petitioners argue that the Board’s assessment of the fee violates Proposition 26 of the California Constitution, codified at article XIII A, § 3, subd. (a). Proposition 26 changed the definition of “tax” to be any “levy, charge or exaction of any kinds imposed by the State,” except in five specific circumstances.

  • Hearing

    Jun 28, 2019

CITY OF SAN DIEGO VS. CALIFORNIA STATE WATER RESOURCES CONTROL BOARD

Petitioners argue that the Board's assessment of the fee violates Proposition 26 ofthe California Constitution, codified at article XIII A, § 3, subd. (a). Proposition 26 changed the definition of "tax" to be any "levy, charge or exaction of any kinds imposed by the State," except in five specific circumstances.

  • Hearing

    Jun 28, 2019

ENTERPRISE RENT A CAR CO OF LOS ANGELES VS SAN DIEGO UNIFIED PORT DISTRICT

Plaintiffs allege the user fee, Resolution and Ordinance are invalid because they constitute an illegal special tax under Proposition 218 and they impose a user fee on car rental customers who will not use the Chula Vista parking structure. Discussion 1. Plaintiffs' Motion for Summary Adjudication Plaintiffs seek summary adjudication of the reverse validation claim which challenges the legality of Resolution 2018-065 and Ordinance 2030.

  • Hearing

    May 30, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

ENTERPRISE RENT A CAR CO OF LOS ANGELES VS SAN DIEGO UNIFIED PORT DISTRICT

Plaintiffs allege the user fee, Resolution and Ordinance are invalid because they constitute an illegal special tax under Proposition 218 and they impose a user fee on car rental customers who will not use the Chula Vista parking structure. Discussion 1. Plaintiffs' Motion for Summary Adjudication Plaintiffs seek summary adjudication of the reverse validation claim which challenges the legality of Resolution 2018-065 and Ordinance 2030.

  • Hearing

    May 30, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

ENTERPRISE RENT A CAR CO OF LOS ANGELES VS SAN DIEGO UNIFIED PORT DISTRICT

Plaintiffs allege the user fee, Resolution and Ordinance are invalid because they constitute an illegal special tax under Proposition 218 and they impose a user fee on car rental customers who will not use the Chula Vista parking structure. Discussion 1. Plaintiffs' Motion for Summary Adjudication Plaintiffs seek summary adjudication of the reverse validation claim which challenges the legality of Resolution 2018-065 and Ordinance 2030.

  • Hearing

    May 30, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

ENTERPRISE RENT A CAR CO OF LOS ANGELES VS SAN DIEGO UNIFIED PORT DISTRICT

Plaintiffs allege the user fee, Resolution and Ordinance are invalid because they constitute an illegal special tax under Proposition 218 and they impose a user fee on car rental customers who will not use the Chula Vista parking structure. Discussion 1. Plaintiffs' Motion for Summary Adjudication Plaintiffs seek summary adjudication of the reverse validation claim which challenges the legality of Resolution 2018-065 and Ordinance 2030.

  • Hearing

    May 02, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

ENTERPRISE RENT A CAR CO OF LOS ANGELES VS SAN DIEGO UNIFIED PORT DISTRICT

Plaintiffs allege the user fee, Resolution and Ordinance are invalid because they constitute an illegal special tax under Proposition 218 and they impose a user fee on car rental customers who will not use the Chula Vista parking structure. Discussion 1. Plaintiffs' Motion for Summary Adjudication Plaintiffs seek summary adjudication of the reverse validation claim which challenges the legality of Resolution 2018-065 and Ordinance 2030.

  • Hearing

    May 02, 2019

  • Type

    Other

  • Sub Type

    Intellectual Property

CITY OF FRESNO V PINEDALE COUNTY WATER DISTRICT

Pinedale contends that the reimbursement/ cost sharing agreement it entered into with Fresno is an unlawful contracting away of its police power to set sewer rates that satisfy Proposition 218 and/or other legal requirements. This argument goes to a claim relating to the rates and charges for the services Fresno is providing. It is not a claim that renders the judgment Fresno is attempting to collect invalid on its face.

  • Hearing

    Apr 25, 2019

CITY OF FRESNO V PINEDALE COUNTY WATER DISTRICT

Pinedale contends that the reimbursement/ cost sharing agreement it entered into with Fresno is an unlawful contracting away of its police power to set sewer rates that satisfy Proposition 218 and/or other legal requirements. This argument goes to a claim relating to the rates and charges for the services Fresno is providing. It is not a claim that renders the judgment Fresno is attempting to collect invalid on its face.

  • Hearing

    Apr 25, 2019

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