Opens in a new tab

A fee by any other name is a tax

November 20, 2010

Or so says a new law approved by California voters on Nov. 2.

Dictionary-and-thesaurus Proposition 26 reclassifies most Golden State regulatory fees on industry as taxes. But the action is more than just a name change.

By being deemed a tax, a measure now will need a two-thirds vote via public referendums or by government bodies before they can be enacted.

When the charges were fees, only a simple majority was necessary to enact or change the charges.

Apparently, the practical effects of the fee-to-tax change weren't that important to most voters. The ballot initiative was passed by a 53 percent to 47 percent margin.

But post-election, lots of folks are worrying about just how wide-ranging the new law's ramifications will be.

The Los Angeles Times reports that "from the Capitol in Sacramento to the boardrooms of county supervisors and city councils, lawmakers and lobbyists are scrambling to assess the fiscal and political effects of the measure, one of the most sweeping ballot-box initiatives in decades."

California environmentalists say the fee-to-tax designation and its supermajority vote requirement make it nearly impossible in the current polarized political climate to increase industry fees for cleaning up air, water and toxic waste pollution.

A similar lament is coming from the state's health advocates regarding efforts to curb smoking and alcohol abuse.

One group, however, is not complaining about the new law. Attorneys.

Companies and interest groups are expected to head to court — a lot — to fight over what should be a fee vs. a tax.

"This poorly drafted initiative is virtually a full-employment act for lawyers," Bill Magavern, California director of the Sierra Club, told the L.A. Times.

Related posts:

Want to tell your friends about this blog post? Click the Tweet This or Digg This buttons below or use the Share This icon to spread the word via e-mail, Facebook and other popular applications. Thanks!

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
How to avoid being haunted by ghost tax return preparers

October 28, 2026

Some ghosts this Halloween are cool trick-or-treaters. But when it comes to taxes, beware of…

Read More
TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
Leave the first comment