California’s Loophole-Ridden Commercial Property Tax

On May 6, 2010 at Logan Elementary in San Diego, David Lagstein of ACCE announced a report (below) about corporations that avoid property taxes in California.

"[I]n virtually every county in the state, the share of the property tax borne by residential property has increased since the passage of Proposition 13 in 1978, while the share of the property tax borne by non-residential property has decreased..."

System Failure: California’s Loophole-Ridden Commercial Property Tax

List of corporations that avoided appropriate property taxes

Our new report documents the county-by-county shift in the property-tax away from commercial property to residential property in part 1, and in part 2 shows how many major properties fail to pay their fair share of property tax...

1. In virtually every county, commercial property is paying a far smaller share of the property tax since Proposition 13 passed in 1978.

2. Commercial property is able to exploit huge loopholes in the law to avoid reassessment upon change in ownership.

The first part of the report, “Who Pays the Property Tax” provides county-by-county data on the changing shares of the property tax between residential and non-residential property. It is based in part on newly-discovered county survey data reported over many years to the Board of Equalization (BOE) which to our knowledge has never before been examined and utilized, and in part on data provided by county assessors, some of whom have substantial records going back in time.

The data is consistent throughout the state: in virtually every county in the state, the share of the property tax borne by residential property has increased since the passage of Proposition 13 in 1978, while the share of the property tax borne by non-residential property has decreased.

Some examples:
...Contra Costa County, the residential share of the property tax went from 48% to 73%
...Santa Clara, the residential share went from 50% to 64%, despite massive industrial/commercial growth
...Los Angeles, it went from 53% to 69%
...Orange, it went from 59% to 72%