CLOSING CORPORATE PROPERTY TAX LOOPHOLES
Since 1978, the residential share of property taxes has skyrocketed from 55% to 72% while the share of property taxes paid by nonresidential commercial property has declined, according to an analysis. When wealthy property owners don’t pay their share, the burden falls on us.
Wealthy corporations and investors in nonresidential commercial and industrial property have ways of avoiding reassessment and keeping their taxes low.
Corporations change ownership all the time, but their property doesn’t get reassessed. They employ armies of lawyers and accountants to exploit loopholes to avoid reassessment.
These corporate loopholes deprive our schools and local communities of billions of dollars in badly needed revenues every year, and we pay the price.
THE SOLUTION: PROP 15 CLOSES THE
THE WEALTHY OWNERS OF ONLY 10% OF CALIFORNIA’S MOST EXPENSIVE BUSINESS PROPERTIES WILL PROVIDE 92% OF PROP 15’S LOOPHOLE-CLOSING REVENUES.
Prop 15 closes loopholes by requiring non-residential commercial and industrial property to be reassessed based on its actual fair market value. The fair market value standard is used in nearly every other state to assess commercial and industrial property.
By closing these loopholes, Prop 15 will ensure wealthy corporations pay their share to support the schools and essential services provided by local communities from which they benefit.
Prop 15 keeps California business property taxes below most other states by maintaining Prop 13’s low 1% limit on property taxes. For example, businesses in Dallas pay 2.56%, in Phoenix they pay 2.57%, and in Portland they pay 2.46%.
Prop 15 also cuts taxes for small businesses and encourages new investment and start-ups by providing businesses with a $500,000 exemption on the business personal property tax on equipment, computers and fixtures. As a result, many small businesses will see a net reduction in their taxes.
Objective media reports on the initiative further clarify that that Prop. 15 closes loopholes exploited by big corporations:
Los Angeles Times: Corporations get big edge in Prop. 13 quirk
Los Angeles Times: Two Prop. 13 defenders decry abuse of loophole by corporations
By closing these loopholes, small businesses will see their taxes go down. A California Budget & Policy Center analysis found that Prop. 15 “could result in tax reductions for more than 4 in 5 of California’s small businesses.”
WANT TO KNOW MORE? READ MORE ABOUT WHAT PROP 15 DOES BELOW!