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.

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.

Prop 13 is under attack: what ‘Split Roll’ actually means

Prop 13 is under attack: what ‘Split Roll’ actually means

Voter beware — the Sacramento politicians are at it again! Last election cycle, the politicians deceived voters at the ballot box and drastically raised our gas and car taxes. This time around, they want to raise the price of everything you purchase – all while decimating jobs across the state. This could be the final straw that breaks the camel’s back and destroys the middle class and the California Dream as we know it. The upside: we can stop it, if we stand together.

In 1978, Californians overwhelmingly passed the “People’s Initiative to Limit Property Taxation,” or as it’s more commonly known, Proposition 13. This limited property tax to one percent of the full cash value. More importantly, it also limited property tax increases to no more than two percent each year. In a high-tax state like California, this measure has been a major success for businesses AND residents. Prop 13 has provided much needed stability in terms of state revenue while also protecting citizens and their businesses from constant tax increases at the whim of out-of-control politicians.

Now, Prop 13 is under attack! Politicians have placed a ballot measure on the November 2020 ballot to massively raise commercial and industrial properties. Worse, the politicians have shamelessly disguised the measure as a way to give more money to schools – which already receive over $60 billion in the California state budget. That is almost one-third of the entire state budget.

This attack – called Split Roll – would take Prop 13 protections AWAY from commercial and industrial properties. While you may breathe a sigh of relief at the fact that the property tax rate on your home won’t change, it’s not safe: Sacramento will be all too eager to raise YOUR property taxes during the next election cycle if this passes.

If Split Roll passes – effectively raising commercial and property taxes – the impact will be felt by working families all over the state. The current booming economy and historically low unemployment rate will reverse almost overnight as employers will be forced to layoff employees or worse – close their doors permanently.

Let’s take a simple example of the devastating impact that Split Roll would have on a small business. Joe and Jane Smith bought a commercial space for their business in 1980. They do a moderate amount of business each year and have three employees. Their property taxes were originally $10,000 per year based on their purchase price of the space, and because of Prop. 13’s protections, their property taxes are now $17,880 per year in 2019.

Now, imagine the Split Roll measure passes in 2020: the Smiths’ commercial property taxes will now be evaluated at “fair market value.” The surrounding neighborhood has grown tremendously, and property values have increased significantly over the past few decades and are hit with a massive, new property tax bill of $65,000 per year.

Now their small business suddenly must choose between keeping the doors open or keeping several dedicated employees. While it may be a simple example, it is a very real scenario facing millions of Californians. And even if the Smiths’ business can withstand a $47,000 increase in taxes, they’ll likely have no choice but to raise their prices – ultimately hurting consumers!

How can we stop it? Don’t sign the petitions you’ve probably seen at your local grocery stores and shopping malls – they have the audacity to tell you that they are “saving Prop 13” when the end result is that it destroys Prop 13. They need to collect over one million signatures and will pull all sorts of tricks in order to do so.

We also must spread the word –– help explain to your family and friends about this horrible ballot measure and make sure they aren’t fooled into signing the petition. Remember, voters across the political spectrum support and rely on the current protections in Prop. 13.

Finally, help Reform California build the coalition to fight back: be a part of our effort and get your local community involved. We’re also raising the funds to mount a strong opposition campaign to this dangerous ballot measure.

Together we can make sure that voters are informed and educated about yet another deceptive ballot measure designed to drain the wallets of hardworking families across California. Sacramento politicians can be beat, but only through the collective, grassroots efforts of citizens standing up and saying enough is enough! This state has driven out millions of residents due to high taxes already — and we cannot allow another tax increase to drive out all of our jobs and businesses, too.

Dave McCulloch is the President of Reform California.

Voter Warning: Don’t Sign Deceptive Petition Claiming to “Save Prop 13”

Voter Warning: Don’t Sign Deceptive Petition Claiming to “Save Prop 13”

The tax-raisers in California are at it again – and voters need to beware!

Signature collection has commenced on a ballot measure that would gut Prop 13 property tax limitations.  Known as “split-roll,” the initiative would impose a massive tax hike on all commercial, industrial and retail properties. The tax hike would lead to cost increases on virtually everything and everyone.

Politicians have already given the tax-hike measure a deceptively attractive title of “Increases Funding for Schools, Community Colleges, and Local Government Services by Changing Tax Assessment of Commercial and Industrial Property.”

Conveniently, this title for the ballot measure removes any mention of the real proposal – A MASSIVE TAX INCREASE.

What’s worse, proponents of this tax hike initiative are now collecting signatures in front of stores with signs that say “Save Prop 13!”

Backers of this tax hike measure need over 1 million signatures of registered voters to place the item on the November 2020 ballot. 

By hiding the true nature of the ballot initiative with a misleading title – and by outright lying to voters in front of stores to get signatures – the backers of this tax hike measure have shown they are absolutely comfortable resorting to fraud to impose their tax hike.

If you want to protect Prop 13 and stop massive tax hikes in California, you need to do two things IMMEDIATELY:

  1. Spread the word: Voters are urged to NOT SIGN the petition and to spread the word to friends, family and colleagues.
  2. Contribute to Oppose the Tax Hike: Reform California is raising funds to oppose this tax hike in the November 2020 election. Please contribute whatever you can today and urge your friends to do the same!

No tax increase will ever be big enough to satisfy the wasteful spending of Sacramento politicians! Help defend Prop 13 today!