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CLSA Wire

CA Supreme Court Strikes Down Hearing on 2018 Ballot Tax Measure

On Wednesday September 9th, the California Supreme Court refused to hear a case brought forward by the Howard Jarvis Taxpayers Association, the California Business Roundtable and the California Business Properties Association regarding whether only a simple majority versus a supermajority vote was necessary to pass a San Francisco corporate tax ballot measure which passed in 2018. The outcome of the case has been monitored closely by business groups as well as local governments as it was the farthest along among several cases currently tied up in the court system. 

Specifically, Prop C asked voters to support an estimated $250M to $300M annually for homelessness and mental health services. The ballot measure was approved by a simple majority in November 2018 and imposed a tax on companies with annual gross receipts of more than $50M as well as a tax on certain administrative payrolls. Since its passage and despite being held up in the court system, San Francisco has been collecting the taxes and holding the funds until the matter was settled.  To that end, in July, the San Francisco Board of Supervisors and the Mayor approved various tax measures for the November ballot which included whether or not the city should create “backstop” taxes to replace those that were tied up in litigation as a result of the Prop C passage in 2018. 

The decision that was delivered by the Supreme Court will certainly change the landscape for new tax proposals at the local and state level.