City Cannot Compel State University to Collect and Remit City Taxes
UPDATE: The California Supreme Court has granted review of this case. The issue before the court is: "Can a charter city require state universities that operate paid parking lots within the city to comply with an ordinance that requires parking lot operators to collect from their customers and remit to the city a tax on the fee charged for a parking space?"
In City and County of San Francisco v. Regents of the University of California (1st Dist., No. 144500, May 25, 2017), the court of appeal considered whether a city had the power to compel state universities that operate parking lots in the city to collect taxes from the parking users and remit them to the city. This case displayed some of the complexities in the distribution of powers between states and local governments, including the issues of preemption, sovereign immunity, and the local taxing power. Ultimately, the court concluded the city could not compel such action by a state entity. Background At issue here was the application of San Francisco's parking lot tax ordinance. The ordinance imposes the tax on parking lot users and requires parking lot operators to collect the tax. Under the ordinance, operators must hold the taxes and periodically remit them to the city. Operators are liable for failing to collect the tax. While the ordinance provides that it is not to be construed as imposing a tax on the state or state entities, it nonetheless requires such entities to collect, report, and remit the tax and pay any taxes they fail to collect. In 2011, San Francisco directed several state universities, including the University of California, to collect and remit the parking taxes. The universities refused, after which San Francisco sought a writ of mandate to force compliance.
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