TAX NEWS - 2010

L.A. Tax: Assemblymember Torres Wins Reversal of Tax Assessments

After Torres introduces legislation to clarify limits in tax law, L.A. Assessor commits to stop practice of charging renters property tax

SACRAMENTO – With the commitment from Los Angeles County Assessor Robert Quon that he will stop the collection of property taxes from tenants who live in publicly owned affordable housing properties, Assemblymember Norma J. Torres (D- Pomona) halted her legislation that would have clarified that Assessors across the state cannot levy those taxes. Chair of the Assembly Housing Committee, Torres introduced the legislation, AB 1187, after requesting for months that Assessor Quon's office stop collecting taxes from tenants in Pomona and other communities who were wrongfully being taxed.

"I am pleased to know Assessor Quon has decided to stop what was not only an undue tax burden on those who are most vulnerable, but also a legally questionable levy of taxes," said Torres.

Private users of tax-exempt public property may be taxed on their possessory interest in the property if the use meets certain criteria, including a private benefit such as personal financial gain or profit. Examples of those who pay this tax include ranchers with grazing rights on federal lands, rental car companies operating in public airports, and private utilities using public rights of way.

The State Board of Equalization (BOE) has long advised county assessors that a tenancy in publicly owned low-income housing does not create a taxable possessory interest. L.A. County will now be coming into compliance with this guidance.

Assessor Quon has agreed to stop collecting these taxes from low-income tenants in L.A. County and return taxes collected with interest. The County Assessor's Association has committed to working with all 58 county assessors to assure that the Board of Equalization's guidance is followed uniformly throughout California.

"I am happy to work with Assessor Quon and the BOE to clarify the law in this area. It is an example of responsive government working to correct an inequity," Torres concluded.