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California Chamber of Commerce Petitions California Supreme Court to Rule Cap-and-Trade Auction as a Tax

California Chamber of Commerce Petitions California Supreme Court to Rule Cap-and-Trade Auction as a Tax

California Supreme Court

Nielsen Merksamer Parrinello Gross & Leoni LLP

California Chamber of Commerce

The California Chamber of Commerce petitioned the California Supreme Court to review an appeals court holding that the auction of emissions credits under the state's cap-and-trade program is not a tax, asserting instead that the program would have qualified as a tax if the appeals court had applied the test in Sinclair Paint Co. v. State Bd. of Equalization.

The California Chamber of Commerce petitioned the California Supreme Court to review an appeals court holding that the auction of emissions credits under the state's cap-and-trade program is not a tax, asserting instead that the program would have qualified as a tax if the appeals court had applied the test in Sinclair Paint Co. v. State Bd. of Equalization.

The California Chamber of Commerce petitioned the California Supreme Court to review an appeals court holding that the auction of emissions credits under the state's cap-and-trade program is not a tax, asserting instead that the program would have qualified as a tax if the appeals court had applied the test in <a href="/lr/resolve/source-document/6gqd" target="_blank" title="Source document">Sinclair Paint Co. v. State Bd. of Equalization</a>. It also claimed that the new two-part test applied by the appeals court threatens to exclude many traditional taxes, and the appeals court conflicted with state supreme court precedent when it declined to consider how the auction proceeds were used when analyzing whether the charge was a tax. Finally the chamber argued that AB 32, which established the cap-and-trade program, should not be construed to vest the Air Resources Board with power to impose an unlimited revenue-raising program.

The California Chamber of Commerce petitioned the California Supreme Court to review an appeals court holding that the auction of emissions credits under the state's cap-and-trade program is not a tax, asserting instead that the program would have qualified as a tax if the appeals court had applied the test in Sinclair Paint Co. v. State Bd. of Equalization. It also claimed that the new two-part test applied by the appeals court threatens to exclude many traditional taxes, and the appeals court conflicted with state supreme court precedent when it declined to consider how the auction proceeds were used when analyzing whether the charge was a tax. Finally the chamber argued that AB 32, which established the cap-and-trade program, should not be construed to vest the Air Resources Board with power to impose an unlimited revenue-raising program.