Taxation

Legal and Tax Aspects for PTAs

 
 
Event Information

Date:

Friday, May 9, 2014

Time:

1:30 - 4:30 p.m.

Location:

Los Angeles Convention Center

Sponsored By:

California State PTA
2014 Annual Convention (May 7-10, 2014)

Presenters:

Marilyn L. Jacobs

 
 

San Diego Transient Occupancy Tax is Calculated by the Amount Received by Hotel Operators, Not Amount Received by Online Travel Companies, if Such Companies Contract Directly With the Public

April 23, 2014 | Bulletin No. 1100404.1

Cities throughout California impose transient occupancy taxes ("TOT") on hotel occupancy.  In In re Transient Occupancy Tax Cases (2014) --- Cal App 4th ----, the Court of Appeal held that San Diego's TOT ordinance is calculated by the rent received by hotel "operators".

Court Authorizes City Subsidy to Car Dealer Two Years After Dealer Relocates to City

February 10, 2014 | Bulletin No. 1080794.1

Juan Lou Gonzales ("Gonzales") owned a Saturn dealership in Palmdale. During the recent recession, General Motors ("GM") stopped making Saturn cars.  As a result, Gonzales sought and was conditionally awarded a Chevrolet franchise from GM.  GM’s conditions required that Gonzales open his new dealership on a short deadline within a specific geographic area.  (City of Palmdale v. City of Lancaster (February 6, 2014 (B243802) --- Cal.Rptr.3d ----, Cal.App. 2 Dist.).

California Supreme Court Reverses the Court of Appeals and the Assessment Appeals Board...

Holding That a Statute Which Requires Reassessment of a Proportionate Interest in a Mobilehome Park After Transfer of Individual Shares of Ownership in the Entity Owning the Park, Does Not Require a Particular Method of Valuation

February 5, 2014 | Bulletin No. 1078652.2

The Assessor for the County of Santa Barbara reassessed two mobilehome parks pursuant to Section 62.1 of the Revenue and Taxation Code using a valuation method recommended by the State Board of Equalization ("SBE").  The mobilehome parks appealed arguing the statute required that a different method of valuation must be applied to such reassessments.  The Supreme Court of California held that the statute was silent as to the particular method of valuation and deferred to the SBE's interpretation of the law.  (Holland v. Assessment Appeals Board No. 1 (--- P.3d ----,  Cal., January 23, 2014).

“Pay First, Litigate Later” Doctrine Applies to Local Governments: Taxpayers Required to Pay Local Assessments Until Resolution of Tax Litigation

November 7, 2013 | Bulletin No. 1041425.1

The Water Replenishment District of Southern California (“District”) protects groundwater quality in Los Angeles County groundwater basins from overuse and saltwater intrusion.  The District finances its efforts through an annual assessment on groundwater pumpers.  The City of Cerritos (“City”) sued the District, seeking money damages and claiming that the District failed to levy its assessment according to Proposition 218 requirements.  The City won the Proposition 218 portion of the lawsuit, but the monetary relief portion of the case has yet to be resolved.

Taxpayer Settlement Agreement Waives Future Claims and Judicially Estops Contradictory Claims

October 14, 2013 | Bulletin No. 1039419.1

After challenging a 1991 Utility User Tax, taxpayers negotiated a monetary settlement agreement with Los Angeles County.  The settlement agreement also provided for an election to validate the tax.  After the election, a member of the class and two other taxpayers challenged the validity of the election.  The lower court found that the class action member, who was party to the settlement agreement, had waived his right to re-assert claims arising out of the same facts and circumstances.  The court of appeal affirmed the lower court’s decision and further determined that the class action member was estopped from asserting a claim that was contradictory to the settlement agreement.  (Owens v. County of Los Angeles (--- Cal.Rptr.3d ----, Cal.App. 2 Dist., October 2, 2013).

Court Properly Applied Substantial Evidence Standard of Review Where Taxpayer Failed to Produce Evidence that External Market Factors Caused Overcapacity Requiring Reduction in Valuation for Assessment of Product Manufacturing Equipment and Personalty

August 27, 2013 | Bulletin No. 1035621.1

An ice cream manufacturer applied to the county in which it operated for a changed property tax assessment on its plant.  The manufacturer and the county agreed on all issues of the reassessment except for the valuation of certain product production lines.  The manufacturer appealed to the county assessment appeals board, which denied a changed assessment on the disputed lines.  The manufacturer sued in state trial court, arguing it proved that excess capacity in the disputed lines justified a reduction in valuation.  The trial court disagreed, finding that substantial evidence supported the board’s finding that the manufacturer failed to bring evidence that external market forces caused the overcapacity.  On appeal, the board and trial court decisions were upheld.  (Dreyer’s Grand Ice Cream, Inc. v. County of Kern (--- Cal.Rptr.3d ----,  Cal.App. 5 Dist., July 22, 2013).

The Substance of Property Tax Rule 474, Relating to the Assessment of Refineries, Was Appropriate, Valid and Consistent with Proposition 13 and Other Tax Laws...

However, the Failure of the Board to Substantially Comply with the Administrative Procedures Act in its Adoption Leads to Its Invalidation

August 26, 2013 | Bulletin No. 1035560.1

The State Board of Equalization (“Board”) enacted a rule that the valuation of petroleum refinery property should assess the land, improvements, and fixtures as a single appraisal unit because they are generally bought and sold as a unit.  An oil and gas industry trade association challenged the rule in state court, arguing that it was improper, violated Proposition 13 and other tax laws and that the procedure used in adopting the rule violated the Administrative Procedures Act (“APA”).  The trial court agreed, holding the rule invalid on both grounds.  The court of appeal upheld the trial court decision.  The California Supreme Court found that the rule was proper, consistent with Proposition 13 and other tax laws, but agreed with the lower courts that the rule should be invalidated because its adoption violated the APA.  (Western States Petroleum Assn. v. Board of Equalization (--- P.3d ----, Cal., August 5, 2013).

Adverse Possessor Of Religious Nonprofit’s Land Does Not Need To Pay Property Taxes To Obtain Title To Land

April 16, 2013 | Bulletin No. 1025788.1

The law of adverse possession allows persons to obtain legal title to property by occupying the property for at least five years, and satisfying other requirements such as the payment of taxes on the property.  In practice, the tax payment requirement prevents most occupiers from successfully obtaining title, but that did not stop a landowner who occupied a portion of the property owned by a neighboring religious organization that was exempt from paying property taxes.

Court Of Appeal Upholds Trial Court’s Ruling That Rejected County Assessor’s Increased Valuation Of Business Property

April 11, 2013 | Bulletin No. 1025738.1

A county appealed from a trial court’s judgment that rejected an administrative decision that upheld a tax assessor’s increased valuation of business property that resulted in an increase in property tax.  The court of appeal held that the trial court applied the correct standard of review, properly admitted evidence at trial that was not introduced in the administrative proceedings, and correctly rejected the revenue figures presented by the county.  (Sky River LLC v. Kern County ( --- Cal.Rptr.3d ----, Cal.App. 5 Dist., February 21, 2013).

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