In 2009, the City’s voters resoundingly defeated Measure P (Business License Tax) by a 79%-21% margin. That measure would have raised business taxes on physicians (and other professionals) by changing the way they are taxed.
Notwithstanding this clear message from our citizens, on January 9, 2012 the City issued a Notice of Tax Deficiency resulting in a current tax (including interest and penalties) in excess of $5 Million to Specialty Surgical Center (and soon to follow to ALL other Surgery Centers) based on an unprecedented tax reclassification which claims that a surgery center’s primary business (75%, in the case of Specialty) is not providing healthcare but, instead, is renting commercial property! This reclassification would allow the City to tax surgery centers on the very basis that the voters rejected—at even higher rates than Measure P proposed.
The City has already begun spending our tax dollars by suing Specialty to collect these taxes even though Specialty’s appeal of the assessment to the Council is pending. Why is the City attempting to collect additional taxes from the medical profession when voters have already told the City “no” loudly and clearly? PROPOSITION 218 (NO NEW TAXES W/O VOTER APPROVAL) amended the California Constitution to protect us from just this sort of thing. Measure P was defeated by such a large margin, with the support of the City Council itself, because it was felt that raising taxes in the face of an economic recession was bad business for Beverly Hills. That argument is even truer today than in 2009.
Please, City Council, Listen--Stop wasting our tax dollars on this misguided litigation. We have already voted and rejected the imposition of additional taxes on our professionals.
Please preserve our citizen rights and grant the appeal by Specialty Surgical Center on October 23rd. Overturn the decision to reclassify Surgical Centers.