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Transactions and Use Tax Court Decisions

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Hoogasian Flowers, Inc. v. State Board of Equalization … (1994)

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Sales Tax Imposed by School District Held Invalid

Plaintiff retailers filed an action against the Board for refund of local sales tax imposed by intervenor San Francisco Educational Financial Authority (EFA) pursuant to an ordinance approved by the majority (but less than two-thirds) of qualified electors. The retailers argued that the tax was unconstitutional under Proposition 13, which requires that special taxes by special districts be approved by two-thirds of the qualified electors voting on the measure.

The court of appeal affirmed the trial court’s grant of summary judgment in favor of plaintiff retailers because the local sales tax imposed by intervenor was invalid as it was not approved by two-thirds of the qualified electors. The court found that school districts were special districts within the meaning of article XIII A, section 4, and because the EFA was a taxing agency controlled by school districts, it was subject to the supermajority requirement of the state constitution. Hoogasian Flowers, Inc. v. State Board of Equalization (1994) 23 Cal.App.4th 1264.