An effort by two residential landlords to overturn a city of San Diego processing fee, imposed to recover the costs of collecting business taxes, has been rejected in Superior Court. Opponents held that the city's $15 fee, approved in 2004, amounted to a tax placed upon a tax. Edward Teyssier, the attorney representing the rental property owners, said the fee violated Proposition 218, a tax-limiting measure passed in 1996 that requires voter approval for a broad range of taxes and assessments. "It is a tax increase disguised as a fee," Teyssier said yesterday.
City officials argued that there was nothing improper about imposing a processing fee for tax administration. Numerous cities in California have done so, said Robbin Kulek, treasury operations division manager. There are more than 160,000 business tax accounts that must be monitored, officials said.
The fee was created to recover the costs of collecting taxes on all types of businesses, including rental properties. On Friday, Judge Charles R. Hayes denied a motion for reconsideration that was filed by Teyssier in October. That motion came after Hayes ruled that the processing fee wasn't a general or special tax and didn't violate the state constitution.
Teyssier said yesterday that the argument that other cities have imposed such fees shouldn't have carried weight with the court. "You can also see there are numerous people who rob banks," he said. "That doesn't make it legal." Deputy City Attorney Joe Cordileone said he expected the case to move to the Fourth District Court of Appeal in San Diego.
Teyssier confirmed that he was considering an appeal. The plaintiffs are rental property owners Sidney Weisblat and Kenneth Ledgerwood. In a related case, Teyssier sued unsuccessfully in 1998 to overturn the city's tax on rental property. Teyssier had held that the tax was a violation of Proposition 218.
Source: SignOnSanDiego.com