Ted Gaines in South Lake Tahoe Thursday to discuss new taxes on commercial properties
SOUTH LAKE TAHOE, Calif. — Ted Gaines, a former California Senator and now a member of the Board of Equalization, will be in South Lake Tahoe this week to discuss a proposed amendment to Proposition 13, known as “Split Roll” tax initiative.
The proposed amendment would remove commercial properties in the state from their property tax protections and tax them on market value and not purchase price.
The South Lake Tahoe Lodging Association is inviting interested community members to attend its monthly meeting at 9:30 a.m. Thursday, Jan. 9, at the Tahoe Chamber/Lake Tahoe Visitors Authority building located at 169 U.S. Highway 50 in Stateline.
Proponents of the amendment, that would be a significant tax hike, announced they have collected 25% of the valid signatures required to place the proposal on the Nov. 3 ballot.
Tahoe Chamber is planning to join with other state organizations to oppose the measure should it make the ballot.
The ballot initiative would amend the state constitution to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value, according to Ballotpedia a nonprofit, nonpartisan online political encyclopedia. In California, the proposal to assess taxes on commercial and industrial properties at market value, while continuing to assess taxes on residential properties based on purchase price, is known as split roll.
As of 2019, Proposition 13, which was passed in 1978, requires the taxable value of residential, commercial, and industrial properties to be based on 1% of the property’s purchase price, with an annual adjustment equal to the rate of inflation or 2%, whichever is lower.
According to the state Legislative Analyst’s Office, market values in California tend to increase faster than 2% per year, meaning the taxable value of commercial and industrial properties is often lower than the market value.
The fiscal impact is $4 billion ($6.5 billion to $10.5 billion in most years). After paying for county administrative costs and backfilling state income tax losses related to the measure, the remaining $6-$10 billion would be allocated to schools (40%) and other local governments (60%).