Democratic Assemblyman Tom Ammiano of San Francisco will introduce a bill into the California Legislature today that could close tax loopholes in Proposition 13. Some believe industrial and commercial property owners are using the loopholes to avoid paying their fair share of taxes. Others, however, believe the problem is overstated and that the bill will only hurt the state’s economy.
AB 2492 seeks to redefine the codes that determine how property is assessed and taxed. Currently, under California tax codes property value is reassessed every time there is a change in ownership. When a home or business changes ownership a new tax rate is established based on what the existing market value is. However, a report released last week by the California Tax Reform Association found instances, statewide, of companies that are paying the rates of the former property owner.