By Jon Coupal and Patricia Bates | For decades, California progressives have complained about a “loophole” in Proposition 13 that unfairly benefits the owners of commercial real estate to the detriment of homeowners. This characterization has been widely accepted by the mainstream media with little critical analysis.
There is no loophole in Prop. 13.
There is, however, an ambiguity in the statute implementing the measure that relates to the “change of ownership” rules. That ambiguity can be easily addressed by a statutory amendment without doing violence to Prop. 13. Both the business community and the state’s preeminent taxpayer organization, Howard Jarvis Taxpayers Association, agree that this change is necessary.
Senate Bill 1237, by state Sen. Patricia Bates, would address this technical tax issue involving fictitious entities such as limited liability corporations and complex partnerships in a way that is wholly consistent with Prop. 13.
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