No on Prop 15: Carl DeMaio and Small Business Owners Warn of New Home-Based Business Tax

No on Prop 15: Carl DeMaio and Small Business Owners Warn of New Home-Based Business Tax

Carl DeMaio and a coalition of small business owners and advocates today held a press conference to urge voters to vote NO on Prop 15 – the massive statewide property tax hike on the November ballot. 

“We already know that Prop 15 immediately imposes a massive tax hike on California’s small businesses, but we are also now learning that the fine print in Prop 15 also authorizes state politicians to impose a new tax on home-based businesses,” said Carl DeMaio, Chairman of Reform California.

DeMaio and the small business coalition he assembled decried the cost of Prop 15’s tax hike to small businesses that are already struggling with Covid-19 lockdowns and an economic downturn. 

“If Prop 15 passes, it will be the final nail in the coffin for many of these struggling small businesses and the job losses will be immense,” DeMaio warned.

DeMaio also released analysis of Prop 15 provisions that he says authorize the state legislature to impose a new tax on home-based businesses. 

“Many small businesses are operating out of people’s homes and Prop 15 opens these home-based businesses up to a massive tax hike,” DeMaio warned.

Prop 15 would increase property taxes on commercial, retail, industrial and other properties to the tune of $11 billion.  Prop 15 is seen as just the first step of a two-step effort to completely repeal Prop 13 from 1978 and increase property taxes on all properties – especially single family homes.

How Prop 15 Authorizes Politicians to Impose a Tax on Home-Based Business

Initiative Text: What Prop 15 Says

AG 2019-0008, Amdt. #1, Initiative Sec. 5, adding Cal. Const. Art XVIII A, Section 2.5(c)(4)(B):

“The Legislature shall also define and provide by statute that limited commercial uses of residential property, such as home offices, home-based businesses or short-term rentals, shall be classified as residential for purposes of paragraph (2) of subdivision (a).” 

AG 2019-0008, Amdt. #1, Initiative Sec. 6, adding Cal. Const. Art XVIII A, Section 2.5(c)(2):

“’Mixed-use property’ means real property on which both residential and commercial or industrial uses are permitted.” 

AG 2019-0008, Amdt. #1, Initiative Sec. 5, adding Cal. Const. Art XVIII A, Section 2.5(c)(4)(B):

“The Legislature may provide for an exclusion from reassessment for the commercial share of mixed use property provided seventy-five percent (75%) or more of the property by square footage or value is residential. 

AG 2019-0008, Amdt. #1, Initiative Sec. 5, adding Cal. Const. Art XVIII A, Section 2.5(d)(1):

Subject to paragraph (2) of this subdivision, upon reassessment pursuant to subdivisions (a) and (b), each commercial and industrial real property with a fair market value

of three million dollars ($3,000,000) or less shall not be subject to reassessment pursuant to paragraph (1) of subdivision (a) and shall be assessed as required by Section 2 of this Article.

Initiative Impact: What Prop 15 Does

How We Know Prop 15 Gives The Legislature the Power to Tax Residential Property Used For a Home-Based Business:

Prop 15 gives the State Legislature the power to define and provide by statute what constitutes “limited commercial uses of residential property.” The Legislature could define “limited commercial uses of residential property” in any number of ways—including how much income a home-based business generates.

If a home-based business does not meet the Legislature’s definition of “limited commercial uses of residential property,” it will be treated as “mixed-use property,” as defined by the initiative, because it has both a residential and commercial use.

In doing so, the Legislature would create two classes of home businesses: one that qualifies as “mixed-use property” subject to reassessment and another that will retain residential designation with “limited commercial use.”

How We Know the Legislature Can Pick and Choose Which Businesses to Raise Property Taxes On:

The Legislature may provide an exclusion from reassessment for the commercial share of mixed-use property but is not obligated to under Prop 15. This is purely optional and is subject to the political whims of state politicians.

This discretion gives the Legislature the power to impose higher property taxes on the commercial portion of home-based businesses with mixed-use designations. The Legislature’s power to define “limited commercial use” will allow politicians to pick winners and losers among home-based small businesses and target those homeowners higher property taxes.

How We Know Residential Properties of ANY Value Operating a Home-Based Business Can Be Reassessed:

The three-million-dollar exclusion from reassessment is for “commercial and industrial real property” only. Thus, it will not apply to a home-based business that is designated as “mixed-use property.”

There is no dollar threshold for “mixed-use property” in Prop 15, so a residential property of any value operating a home-based business could be subject to higher property taxes.

What Prop 15 Means for Residential Property Used For Home-Based Businesses:

Prop 15 strips long-standing Prop 13 protections from residential property. Prop 13 limits property tax increases to 2% annually, providing certainty to homeowners and small businesses that they can afford their taxes in the future. Prop 15 allows state politicians to raise property taxes on millions of home-based businesses – meaning skyrocketing property taxes for homeowners.

More Californians than ever are conducting businesses from their homes, and Prop 15 gives the Legislature the power to raise taxes on these homeowners. If past actions by the Legislature are an indication of future behavior, it’s likely that many home businesses will be subject to Prop 15’s higher property taxes.

Taxing home businesses is just another step towards the full repeal of Prop 13 for all homeowners.

Carl DeMaio’s California Election Guide 2020

Carl DeMaio’s California Election Guide 2020

The 2020 California General Election ballot is REALLY long and confusing – and over 240 tax hikes have been placed on the ballot this cycle. 

Worse, politicians have even deceptively worded several ballot measures to hide the tax hikes and other bad policies!

Fortunately, Carl DeMaio reviews all ballot measures and candidates and produces a “Plain English” voter guide to help voters by revealing

which ballot measures contain tax hikes and suggesting some great candidates that are worthy of support.

Please review the voter guide for yourself – and then share it with your friends by emailing/posting this simple link: www.ElectionGuideCalifornia.org

ACCESS THE VOTER GUIDE HERE

Carl DeMaio Holds Town Hall on Top 12 Target Races in California

It will be a tough election cycle for us in California. Reform California Chairman Carl DeMaio is fighting back hard and held a town hall on the top 12 target races in California. DeMaio announced the 12 Top Target Seats for Republicans in California and discussed what can be done to either pick up seats or save seats for Republicans.

California State Senators Moorlach and Chang were in attendance as well as several other candidates from across the state. The target seats include Congressional seats as well as state senate and assembly seats, many of which overlap each other which helps Republicans maximize their opportunity.

The Top 12 Target Seats (Tier 1) in California currently are:

Congress

State Senate

State Assembly

Watch the town hall below and learn how you can join the fight to take back California.

San Diego County Voters Face Expensive November Election Ballot: 13 Tax Hike Measures, $2.5 Billion in New Debt

San Diego County Voters Face Expensive November Election Ballot: 13 Tax Hike Measures, $2.5 Billion in New Debt

Carl DeMaio Slams Local Politicians for Proposing Costly Tax Hikes During Pandemic; Urge “NO” Votes on All Local Tax and Bond Measures

In the midst of a severe economic downturn and pandemic, local politicians in San Diego county are asking struggling taxpayers for even more money by filling November’s local election ballot with 13 separate tax hike measures. Local politicians hope that a crowded ballot combined with no funded and organized opposition campaign may result in their favored tax hike passing. Not this year. A coalition of activists, elected leaders, and taxpayer advocates led by Reform California today will hold a press conference to announce a unified campaign to defeat all 13 local tax measures. The development of an organized opposition campaign to these tax hikes increases the likelihood they will be defeated.

Local Bond Measures: $2.494 Billion
Local Bond Measures: $2.494 BillionLocal Tax Measures: $50+ million per year

“At a time when San Diego families are already struggling because of the economic downturn and the pandemic, local politicians should be ashamed that they filled up San Diego county’s election ballot with tax hikes and more debt. These same politicians were hoping no opposition campaign would be launched against their tax hike, but we’re here to make it clear that we will fight every tax hike and debt proposal on the San Diego county local ballot. By voting NO on all of these flawed and costly measures, voters can tell San Diego County politicians loudly that we won’t support their out-of-control and out-of-touch spending.” – Carl DeMaio, Chairman, Reform California

California Supreme Court Ruling on Pension Reform Falls Short

Today the California Supreme Court issued a ruling that upholds the modest PEPRA pension reform law enacted by former Governor Jerry Brown.  While the ruling may seem like a win for taxpayers, Reform California Chairman Carl DeMaio, who also authored San Diego’s 2012 landmark pension reform initiative, says the ruling is quite narrow and provides little legal relief for taxpayers.

DeMaio issued the following statement in response to the ruling:

“By crafting a narrow ruling that sidesteps the fundamental flaws with the notorious California Rule, the California Supreme Court seems hell bent on forcing California taxpayers to bear the excessive costs of unsustainable pension payouts for state and local government employees.  Because the California Rule remains untouched in this decision, taxpayers will continue to face legal hurdles that could prevent them from modifying or reforming excessive and unsustainable government pension payouts.  The result will be higher taxes, less services, and potential insolvency in California’s cash-strapped state and local government pension systems.”

With today’s ruling the California Supreme Court has upheld PEPRA reforms such as banning the addition of unused sick time, bonus pays and some specialty pay to pension calculations – all common tools used by government workers to spike pensions.

A full copy of the ruling can be accessed here:

https://www.courts.ca.gov/opinions/documents/S247095.PDF

Carl DeMaio Launches Campaign to Protect Prop 13 and Stop Property Tax Hikes

This is it – politicians in Sacramento have launched their all-out assault to repeal Prop 13 and raise taxes this November. Carl DeMaio, Chairman of Reform California, has launched the resistance to save and protect Prop 13 and organized a statewide virtual town hall where he outlined the campaign to protect Prop 13 and gave instructions on how supporters can join in the efforts in their areas.

Carl DeMaio Holds Town Hall On Risks Facing Small Businesses from AB5 & PAGA

Reform California Chairman Carl DeMaio held a town hall with the California Business and Industrial Alliance where they warning Californians about costly new mandates stemming from AB5 and PAGA that are being implemented by Sacramento politicians.

The negative impacts of Covid 19 and new enforcement actions on AB5 and PAGA are destroying jobs. Lost wages may never be recovered and businesses may not come back from this. The Town Hall will equip you with the facts you need to know to keep your business safe!