California Court of Appeal Finds Sales Tax Penalty Provision of Keep Groceries Affordable Act Unlawful

The California Court of Appeal March 27 found the penalty provision of the Keep Groceries Affordable Act unlawful, for sales and use tax purposes. The act’s provisions prohibit charter cities, counties, and other local governments from imposing taxes, fees, or assessments on sodas and sugar-sweetened drinks. An advocacy nonprofit and a city council member challenged the act’s penalty provision, arguing it wrongly penalized charter cities lawfully exercising their constitutional rights under the home rule doctrine. The trial court found the penalty provision unlawful and unenforceable. The State of California and the Department of Tax and Fee Administration (CDTFA) appealed. The ...