Property taxation: low-value exemption: possessory interests in publicly owned streets and sidewalks.
The implications of AB 3268 could significantly alter the landscape of property taxation in California. By allowing counties to exempt low-value properties, the bill aims to streamline tax administration and potentially reduce the fiscal burden on local governments. However, the lack of reimbursement for revenue losses resulting from this exemption raises concerns about the long-term financial effects on local agencies, which could lead to budget shortfalls in the absence of state support.
Assembly Bill 3268, introduced by Assembly Member Low, seeks to amend the Revenue and Taxation Code concerning property taxation by expanding the low-value property tax exemption for possessory interests in publicly owned streets and sidewalks. The bill authorizes county boards of supervisors to establish a rebuttable presumption that such interests, especially when used for parklets, are of too low a value to justify the cost of assessment and collection. The proposed exemption limit is set at $50,000 for lien dates from January 1, 2020, to January 1, 2030, for possessory interests and certain related applications.
The sentiment around AB 3268 is mixed among stakeholders. Proponents argue that the bill promotes economic development and facilitates easier business operations, particularly in urban areas where parklets are common. Opponents express caution regarding the lack of state reimbursement for lost revenue, fearing it may strain local government finances. As a result, this bill highlights the ongoing tension between state-level policy objectives and the financial realities faced by local jurisdictions.
A notable contention is the immediate effect of the bill as a tax levy, with no state appropriation designated for lost tax revenues. This provision could lead to significant disparities in how different counties manage their finances regarding property taxation. The ability for county assessors to decide whether to enroll properties or apply exemptions adds another layer of complexity, raising questions about uniformity and fairness in tax administration across the state.