Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales And Use Tax Court Decisions


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Howard Jarvis Taxpayers' Association v. State Board of Equalization . . . (1993)

Local Retail Transaction and Use Tax Ordinances Held Invalid if Not Approved by Two-Thirds of County's Voters

In 1989, the Legislature enacted the Orange County Regional Justice Facilities Act and the County Regional Justice Facilities Financing Act, which authorized counties to establish agencies for purposes of financing and coordinating the construction, acquisition, furnishing, maintenance and operation of adult and juvenile detention facilities and courthouse facilities. The Acts authorized the agencies to adopt by ordinance a county-wide sales tax by a majority of the electors voting on the measure.

Plaintiffs challenged the Acts, seeking a declaration that they unconstitutionally authorized a special district to impose an ad valorem tax without securing approval of two-thirds of the voters of the district, in violation of Section 4 of Article XIII A of the California Constitution (Proposition 13).

The court of appeal held that since the Acts created agencies that were "special districts" within the meaning of Proposition 13, any tax ordinances that would have been adopted by the agencies pursuant to a simple majority vote would have been invalid. However, the Legislature had amended the Acts to authorize the agency to require approval by at least a two-thirds vote, as mandated by Proposition 13. The court of appeal therefore refused to declare the Acts void in their entirety, instead limiting relief to a declaration that a tax adopted pursuant to the Acts would be valid only if approved by a two-thirds vote. Howard Jarvis Taxpayers' Association v. State Board of Equalization (1993) 20 Cal.App.4th 1598.