Opinion ID: 1412641
Heading Depth: 1
Heading Rank: 10

Heading: Regulation and Revenue

Text: It has been asserted that numerous subjects found to be of statewide concern over the past 80 years all involved activities essentially regulatory in nature. [2] In contrast, on the specific issue of taxation for revenue only, numerous cases declare without equivocation or qualification that imposing taxes for revenue purposes is a municipal affair. [3] The distinction drawn between regulatory state legislation (of statewide concern) and local taxation for revenue only (a municipal affair) may have historical support; however, there is no reason to conclude that such distinction must be drawn in the instant case. To the contrary, it seems just as evident that the Legislature intended to prohibit local taxation for revenue in order to control the entire field for both regulatory and revenue purposes. Furthermore, there is no longer any reason to conclude that local tax ordinances are, by their nature, municipal affairs. Local revenue raising has, in many instances, become of compelling statewide concern. One need only view the legislative turmoil over local property tax relief and equalization of school revenues to recognize what an overriding state interest may be involved in local taxation. Of the cases cited as declaring local taxation for revenue only a municipal affair, all but two did not involve a direct conflict with state law. In most the issue was whether the city was empowered to act at all, even without prohibition by general law. Of the cases cited, only two actually held local ordinances superior to the conflicting state enactment, and both of those arose near the turn of the century and involved the same state statute. ( Ex Parte Braun, supra , and Ex Parte Helm (1904) 143 Cal. 553 [77 P. 453].) Each case cited involved an excise tax. Therefore, with respect to a tax other than an excise tax, the statement that a revenue tax is a municipal affair is dicta. Finally, the tax cases cited involved excise taxes with no extraterritorial effect. In contrast, the tax before us: (1) involves direct conflict with state law; (2) is an income not an excise tax; and (3) has an extraterritorial effect. The guidelines enunciated in this dissent were applied in Century Plaza Hotel Co. v. City of Los Angeles (1970) 7 Cal. App.3d 616 [87 Cal. Rptr. 166]. There Los Angeles imposed an excise tax of 5 percent upon the purchase of alcoholic beverages sold by a retailer for consumption on the premises. The tax was a local tax for revenue only. The appellate court framed the issue as: Does the Ordinance Represent a Valid Exercise of the Powers of a Charter City Over Its Municipal Affairs? Finding the matter of statewide concern, the appellate court held the ordinance invalid. Petition for hearing by this court was denied. ( Id., at p. 626.) In thus holding, the appellate court: (1) framed the issue as involving the home rule provisions of section 5, subdivision (a), and not the in conflict with provisions of section 7 of article XI ( id., at p. 620 and fn. 3); (2) found both conflict and preemption ( id., at p. 624); (3) noted that under Bishop the legislative intent is not conclusive ( id., at p. 625); (4) examined the reasons for preemption expressed by the Legislature ( id. ); (5) examined matters of statewide concern ( id., at p. 626); and (6) found no purely municipal affair ... but a matter of statewide significance. In short, the court of appeal applied the analysis of the Professional Fire Fighters and Bishop cases, as set forth above. Applying these rules and guidelines, the first question presented is whether there is conflict or preemption in the case before us.