February 27, 2020

The Government, Finance and Administration Policy Committee requests feedback and comments on several tax-related bills of County interest.

SB 1072 (McGuire) – Transient Occupancy Tax Collection

CSAC is requesting comments on SB 1072, by Senator Mike McGuire, which would allow local governments to contract with the State Department of Tax and Fee Administration to collect Transient Occupancy Taxes on short-term rentals. For the purposes of this bill, short-term rentals would not include hotels or motels, but homes, or rooms in homes, which are rented for30 days or less. It would not allow the state to disclose to local governments the addresses of the short-term rentals.

Is this voluntary program welcome among counties that don’t already have robust TOT collection programs? It would be preferable for the short-term rental platforms (including Airbnb and VRBO) to disclose addresses so local officials could ensure those properties are complying with other regulations. However, including that provision would be certain to invite strong opposition from the industry, reducing the bill’s chance of passing. Please send any comments on this bill to Geoff Neill at gneill@counties.org.

AB 2013 (Irwin) – Property Tax on Post-Disaster Reconstructions

CSAC is requesting comments on AB 2013, which would allow disaster victims whose property has been destroyed to maintain their property tax base-year value for new construction on the same site if the new construction is no more than 120% of the destroyed home’s value or square footage. An identical bill was introduced last year and passed the legislature before it was vetoed by Governor Newsom. The Governor has concerns that the bill should be narrowed to minimize “negative impacts on local revenues.” Coming amendments will likely aim to address the Governor’s concerns by limiting the bill to Governor-declared disasters.

On one hand, this legislation gives certainty to those rebuilding after a disaster. Currently, determinations on whether the value of new construction is “substantially similar” to the destroyed property is implemented differently in different counties. The policy could increase the tax roll in the long term by allowing higher-value homes to be built, which would be taxed at full value when it changes hands.

On the other hand, the bill reduces local control by imposing a uniform test for what constitutes as “substantially similar.” This could possibly decrease tax revenue in the short term if property owners would have rebuilt larger homes without this tax break. Please send any comments on this bill to Geoff Neill at gneill@counties.org.

The Assembly Committee on Revenue and Taxation is holding a hearing on March 9 and AB 2013 is on the agenda.

AB 1959 (Mayes) – Deferral of Property Tax Payments During Appeals

CSAC opposes AB 1959, which would allow a taxpayer who has filed an appeal with a county to defer payment of their property taxes until the appeal is resolved. Appeals already overburden assessment appeals boards in many counties and this bill would lead to an increase in appeals filed simply to delay payment, thus increasing costs to no benefit.

The Assembly Committee on Revenue and Taxation is holding a hearing on March 9 and AB 2013 is on the agenda.