One of the concerns of the business community and taxpayers is that the legislature is calling taxes “fees” to get around the constitutional two-thirds vote requirement to pass a tax.
This deceptive practice has caused an initiative to be launched in an effort to put a check on this procedure, which is adding to the economic burden of California businesses and citizens. The California Taxpayers Association and the California Chamber of Commerce head up the Stop Hidden Taxes Coalition. The Small Business Action Committee is a member.
The coalition expects to qualify the initiative for the November ballot. For more information on the initiative and the effort to stop hidden taxes, visit www.nomorehiddentaxes.com.
Cal Tax recently highlighted four such “fees.”
Alcohol "Fee". AB 1694 (Beall) imposes an additional alcohol "fee" on
wholesalers, for alcoholic beverages delivered to retailers, at a rate of 5 cents for
each 1.5 ounces of distilled spirits, 12 ounces of beer or 5 ounces of wine. The "fee"
will go to fund the newly created Alcohol-Related Services Program.
Community Benefits Fund. AB 1405 (De Leon) establishes the Community
Benefits Fund as part of the California Global Warming Solutions Act of 2006. The
bill would require an unspecified percentage of "fee" revenues to be deposited into
the fund. The revenue would be used in the "most impacted and disadvantaged
communities in California to accelerate greenhouse gas emission reductions and
mitigate direct health impacts of climate change."
Bag "Fee." AB 1998 (Brownley) creates a "Bag Pollution Cleanup Fee" of at least
25 cents on single-use carryout bags, effective July 1, 2011. Under the bill, chain
stores would be prohibited from providing a single-use carryout bag to a customer
unless the store charged a "fee" of not less than 25 cents per bag at the point of
sale. The bill would prohibit a store from distributing a single-use carryout bag that
is not plastic or compostable and meeting specific requirements. The "fee,"
administered by the Board of Equalization, provides revenue to be used for grants
to local governments for various programs.
Tax-Like Fee on Organizations and Business That Sell Various Products. AB
2139 (Chesbro) requires certain businesses to enter into "product stewardship
organizations" and pay large "fees" to the state. The requirement would include
producers or sellers of hypodermic needles; containers that contain pesticides for
residential use; small propane tanks; personal butane lighters; and single-use food
packaging. The mandatory organizations would be required to develop use and
recycling plans, to be approved or disapproved by the state. A $10,000 fee would
be imposed on submission of the plan and another $1,000 fee would be imposed
annually thereafter. The fees and high penalties for failure to comply would be
allocated by the Legislature, to cover the board’s program implementation costs
and as incentives to enhance recyclability and redesign efforts and to reduce
environmental and safety impacts of covered products.