Metropolitan News-Enterprise


Wednesday, March 29, 2023


Page 3


Court of Appeal:

Act Penalizing Chartered Cities That Tax Groceries Is Invalid


By a MetNews Staff Writer


The Third District Court of Appeal has affirmed a trial court determination that the “Keep Groceries Affordable Act of 2018” which bars chartered cities from taxing certain groceries such as soda pop and other sweetened drinks violates the “home rule doctrine” embodied in the state Constitution for more than 100 years.

The act, which was invalidated by Sacramento Superior Court Judge Shelleyanne W.L. Chang, provides in Revenue and Taxation Code §7284.12 that chartered cities that lawfully impose such taxes will suffer a total loss of revenue from sales and use taxes.

Justice Stacy E. Boulware Eurie said in Monday’s opinion that the purpose was “to prevent charter cities from enacting certain taxes, either through a direct prohibition or, if that proves ineffective, through the threat of severe penalties.”

Improper Threat

She wrote:

“Considering this purpose, we find, like the trial court, that section 7284.12 improperly uses the threat of crippling penalties to chill charter cities from exercising their constitutional rights….It serves to penalize a charter city only when its tax, fee, or other assessment on groceries is a valid exercise of [the] city’s authority under Section 5 of Article XI of the California Constitution with respect to the municipal affairs of that city.’…That intentional penalty on a charter city’s lawful exercise of its constitutional powers cannot stand.”

That constitutional provision says:

“It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they shall be subject to general laws.  City charters adopted pursuant to this Constitution shall supersede any existing charter, and with respect to municipal affairs shall supersede all laws inconsistent therewith.”

Sensible Reading

A sensible reading of the challenged act, Boulware Eurie said, is this:

“…The Legislature wanted to discourage charter cities from enacting a tax, fee, or assessment on groceries, even if it could not lawfully prohibit them from doing so. That reading explains why the Legislature directed the penalty toward charter cities only—the one local agency with home rule authority under article XI, section 5.  It explains why the Legislature imposed the penalty only when a charter city ‘valid[ly] exercise[s]’ its constitutional powers under the home rule doctrine.  And it explains why the Legislature believed the penalty necessary in the first place.”

The act was inspired by legislation by four cities—starting with Berkeley—between 2014 and 2016 taxing sweetened beverages. The act was challenged by Cultiva La Salud, a nonprofit group that seeks to promote healthy diets, and by that, among other things, promotes healthy diets—and by Santa Cruz City Council member Martine Watkins.

The case is Cultiva La Salud v. State of California, 2023 S.O.S. 1194.


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