Friday, February 22, 2013
C.A. Rejects Challenge to Shopping-Bag Law, Says 10-Cent Charge for Paper Bags Is Not a Tax
By a MetNews Staff Writer
A county ordinance prohibiting retailers from providing customers with plastic bags and requiring that they charge 10 cents for paper bags does not levy a tax that requires voter approval, the Court of Appeal for this district ruled yesterday.
Div. Three affirmed Los Angeles Superior Court Judge James Chalfant’s ruling that the charge for paper bags is not a tax within the meaning of Proposition 26, which requires voter approval for new general or special taxes levied by a local government, because the retailer keeps the money.
The ordinance, which applies to unincorporated areas of Los Angeles County—several cities, including Calabasas, Glendale, Long Beach, Malibu, Manhattan Beach, Pasadena, Santa Monica, and West Hollywood. have similar ordinances—was enacted in November 2010. It contains an exception requiring the stores to provide free bags, either plastic or paper, to customers participating in certain government programs for the poor.
Several taxpayers joined with a plastic bag manufacturer, Hilex Poly Co. LLC, to challenge the law in October 2011. In denying relief, Chalfant ruled that the bag charge was not a tax and that even if it met the general definition of a tax under Proposition 26, it would fall within an exception allowing a “charge imposed for a specific benefit conferred or privilege granted directly to the payor” and not exceeding the reasonable cost to the local government of conferring the benefit or granting the privilege.
The exception applied, Chalfant reasoned, because everyone who paid the charge got a paper bag. The plaintiffs, the judge ruled, waived their argument that the second prong of the exception did not apply, because they waited too long to assert it.
Justice Walter Croskey, writing for the Court of Appeal, said there was no tax.
Proposition 26, he explained, was enacted in 2010 to limit the circumstances under lawmakers could avoid putting taxes to a public vote by defining them as fees or charges. It was not intended, the justice said, to alter the traditional definition of “tax” as “a compulsory payment made to the government or remitted to the government.”
The argument that an ordinance levies a tax if it requires payments to a private entity for providing a benefit or service, while exempting that same requirement if the payment is made to the government, is inconsistent with the text and history of Proposition 26, and with the accompanying ballot pamphlet language, Croskey added.
The case is Schmeer v. County of Los Angeles, B240592.
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