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1 Joseph Henchman, et al., Charging Taxpayers for Tax Collection Is a Tax: Weisblat v. City of San Diego 1 (2009)

handle is hein.taxfoundation/ffbgaxz0001 and id is 1 raw text is: FOUNDATION February 2009 No. 160 FISCAL FACT Charging Taxpayers for Tax Collection Is a Tax: Weisblat v. City of San Diego by Joseph Henchman, Travis Greaves and Adam Van Susteren Executive Summary The Tax Foundation has filed a friend-of-the-court brief in Weisbiat v. City of San Diego, currently pending before the California Court of Appeal. The case involves San Diego's tax on landlords who rent their property, which raises $11 million per year. Barred by Proposition 218 from raising this tax without a public vote, city officials instead opted to impose a processing fee to pay for the collection of the RUBT. This processing charge raises $3.5 million a year. The Tax Foundation brief reviews standards for defining taxes and fees in California and throughout the country, and concludes that the charge is a tax because its purpose is to raise revenue for a quintessential government activity (tax collection). San Diego imposed the charge in response to a revenue shortfall, and the revenue that is raised funds no services to those who pay it, nor does it confer any exclusive benefits or privileges to them, nor does the revenue from the charge fund any program that regulates the conduct of landlords or rental businesses. Contrary to San Diego's assertion, whether tax collection is a special project or a general governmental enterprise does not alter the conclusion that the charge is a tax and not a fee. Further, a law restricting the use of fee revenue does not substitute for the constitutional tax/fee inquiry. Finding that the processing charge imposed by Resolution R-299382 is a tax would also uphold the purpose and meaning of Propositions 13 and 218, which sought debate and voter consent where discrete groups are targeted for revenue increases but the benefits accrue to society at large.

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