City Parking Tax Is Constitutional


The California Court of Appeal recently considered whether a city’s parking tax ordinance violates the equal protection clause of the California Constitution because it exempts certain parking from the tax. (City and County of San Francisco v. Flying Dutchman Park, Inc. (— Cal. Rptr.3d —, 2004 WL 2005917, 4 Cal. Daily Op. Serv. 8324, Cal.App. 1 Dist., Sept. 9, 2004))


The City and County of San Francisco (City) imposed a tax in the early 1970s “for the rent of every occupancy of parking space in a parking station in the City and County.” The parking tax does not apply to certain parking activities by some hotel and apartment residents and active duty military personnel. Under the ordinance, parking operators are required to collect the tax from the occupant and remit it to City. On a challenge by one of the parking operators, the trial court determined that the parking tax is unconstitutional because it violates the equal protection clause of the California Constitution.

Appellate Court Decision

A tax ordinance violates California’s equal protection clause if it selects a class of persons for a species of taxation and no rational basis supports the classification. In other words, if there is “any reasonably conceivable state of facts that could provide a rational basis for the classification, the tax ordinance will be upheld.” Looking at the historic context of the time when the parking tax was enacted, the Court of Appeal determined there were rational reasons for the three exempted classes.

  • Long-term parking by military personnel on active duty. The tax and exemption were enacted at the height of the Vietnam War to relieve military personnel from paying parking tax for long periods when they were called to arms. The reason is equally valid today.
  • On-site parking by hotel guests or apartment residents. The 1970s saw great real estate development and economic growth in San Francisco, especially in the tourism, convention, and retail industries. Exempting on-site parking by hotel guests and apartment residents encouraged developers to build necessary parking facilities, thereby alleviating pressure on and competition for on-street parking.
  • Off-premises hotel parking where the “rent” is included as part of the room charge. This exemption has the dual purpose of (1) preventing the imposition on hotel guests of double taxation (parking and occupancy taxes), thereby reducing hotel costs and encouraging tourism and convention business, and (2) reducing the administrative burden on hotels, which were required to collect the separate taxes.

Thus, the Court of Appeal determined the parking tax does not violate the equal protection clause.

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