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California Split Roll Tax

If enacted, the 2020 ballot initiative could raise over $11 billion in commercial property taxes in the state, by removing the existing cap for non-residential property holders and adopting a new tax formula that will significantly increase the amount retail and other businesses will owe.

This ballot initiative would upend Proposition 13, the residential and commercial property tax linkage that has been in effect since 1978. The measure proposes to tax “certain commercial and industrial real property based on fair-market value — rather than, as under current law, the purchase price with limited inflation.” Commercial property owners may face substantial increases for the foreseeable future.

What’s at stake:

  • In addition to paying more in taxes because of a new basis, the outcome of the referendum creates vast uncertainty about the level of commercial property tax rates going forward.   
  • Recent political issues in California, including the Los Angeles school strike, housing and rent control issues, and super majorities in the legislature mean this issue is likely to be contentious and challenging to defeat. The state may dedicate part of any increased revenue to local services and education.
  • Commercial property owners and the public need to work together to educate voters about the detrimental effect split roll will have on the state’s economic welfare.
  • This initiative could destabilize commercial development in California for years to come.  

Access the latest information

California Split Roll Tax Issue Brief

Californians to Stop Higher Property Taxes

For more information

Herb Tyson

Vice President of State & Local Government Relations

+1 202 626 1405