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Jon Fleischman

Taxpayer Protection Suit Filed Against LA County’s Illegal Paper Bag Tax

Last November, FR friend Joel Fox over at his Fox & Hounds website was prescient in his blog post saying that the action by the Los Angeles County Board of Supervisors to both ban plastic shopping bags and impose a tax on paper bags would be challenged on the grounds that it violates newly-passed Proposition 26. Well today Hilex Poly, a large-scale producer of plastic grocery bags filed just that lawsuit.   Under the state constitution, a tax on paper bags clearly would need to go to a vote of the people.  However advocates are trying to say that because the ten-cent per bag tax is mandated by the government, but not collected by the government (grocers apply the fee and are then forced to spend the funds at the direction of the county), then it is not actually a tax.  Of course that argument is ludicrous on its face.

“Los Angeles County’s bag ‘charge’ on consumers violates Proposition 26, which clearly requires local taxes be approved by a two-thirds vote. The ten-cent tax imposed on bags was never approved by voters much less by a two-thirds vote,” said James Parrinello, senior litigation partner at Nielsen Merksamer Parrinello Gross & Leoni. “Proposition 26 was implemented to counter situations exactly like this one where taxes are labeled by the local government as ‘fees’ in order to circumvent the electoral process.”

“This charge is not only illegal but it’s a hidden tax, exactly what Proposition 26 was meant to stop,” stated Mark Daniels, Vice President of Sustainability and Environmental Policy for Hilex Poly. “Policymakers have the right to pass bad laws but they do not have the right to pass illegal ones that sidestep the electoral process and, in this case, unfairly punish consumers.”

We’ll have more on this soon.  But it certainly should be relevant to the deliberations taking place in Hungtington Beach in Orange County tonight, where the city council is considering whether to dump $40,000 in taxpayer funds to conduct an environment impact report to adopt a ban largely identical to the one in Los Angeles County.  The funds for the EIR could pale in comparison to litigation costs…

UPDATE:  Joel Fox has blogged on today’s news here.  He calls this lawsuit “precedent setting” — we agree.

One Response to “Taxpayer Protection Suit Filed Against LA County’s Illegal Paper Bag Tax”

  1. Robert Bosich Says:

    Guerilla Marketing books highlight those small inexpensive and practical steps to improve your organization….

    Applaud this effort to take a small step to slow the regulation goons with enormous precedent setting potential.

    Isn’t in pleasing and uplifting to know some are going on offense instead of riding the pine and waiting to be waived…..