May It Please The Court

RSS Feeds
MIPTC Author
About J. Craig Williams

May It Please The Court
by Leonard Rivkin
Barnes & Noble CLE Books

Weblog Comments
Return to the Weblog

Quote of the Day - What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin. - Mark Twain
Claim Your Profile on Avvo

Did You Get Your Refund Of California's Hazardous Materials Fee?

Since 1989, the State of California has levied a fee on California corporations that employ more than 50 employees, and called it a "Hazardous Materials Fee."  If your company meets the employee threshold and uses hazardous materials, then you likely pay this fee each year.  About the only "company" that doesn't have to pay this fee (what you're about to read is the State's logic, not mine) is a "private household," defined under Standard Industrial Code 88.  Don't ask me how a private household got an SIC set of numbers. 

What you also probably didn't know, however, is what the State classifies as hazardous materials:  "fluorescent light bulbs, batteries, inks, correction fluid, and toner used in printers and facsimile machines."  I'm not kidding.  And don't get mad at me, either, I just report the facts.  I couldn't make up stuff this good. 

The fees can run into the tens of thousands for large companies, but for companies with just over 50 employees, the fee is $200/year.  The tax (let's be truthful about what to call it) funds the California Department of Toxic Substances Control. 

Morning Star Company is a tomato packing plant.  Good, vine-ripe California tomatoes.  Healthy tomatoes that have nothing to do with hazardous waste.  Morning Star rightfully asked the question why it had to pay the hazardous waste tax, and started making its payments under protest.  It then sued the State Board of Equalization, which collected the tax for the DTSC, for a refund.

Not surprisingly, the SBE denied Morning Star's request for a refund.  The Supreme Court just decided the matter earlier this week and ruled in favor of Morning Star, ordering the SBE to consider the refund request in light of the Supreme Court's invalidation of the regulation issued by the DTSC.

The Court reasoned that since the DTSC had never held a public hearing on its regulation imposing the tax on every corporation, the DTSC violated the State's Administrative Procedures Act because it violated the Constitutional right to due process of notice and hearing.  The Court, however, declined to invalidate the entire tax/fee structure, and allowed the current interpretation (applying the tax as broadly as possible) because of the "disruption to the system" (read:  lack of financing).

So, if you're interested in a refund, then you need to apply to the SBE soon.  If you want to stop the tax from going into effect, then you'll have to file your objections with the DTSC quickly. 

Posted by J. Craig Williams on Thursday, April 27, 2006 at 18:55 Comments (0)


No comments added yet. Be the first to comment on this entry!
Add your Comments
You may also leave audio comments by calling our audio comment line at 206-338-3088. Leave us a message and we'll post it here.

Please do not include any HTML or URLs in the comment field. If included, your comment will not be accepted.
*Indicates required fields
Character Count: