Prop 15 – Tax on Commercial and Industrial Properties for Education and Local Government
If passed, Prop 15 would amend California Tax code to require commercial and industrial properties to be taxed at their market value rather than their purchase price. This would change longstanding provisions of Prop 13 (1978) and create a “split-roll” between commercial and residential property.
Changes would take effect in FY 2022-2023. Some properties, such as retail centers with more than 50% occupancy of small business would have until FY 2025-2026 for changes to take effect. Exceptions would be made for small businesses and start-ups with $3m or less in holding in CA. These properties would continue to be assessed at their purchase price.
Prop 15 would also exempt small businesses tangible personal property from taxes and $500,000 of tangible personal property from non-small businesses.
It is estimated that, if passed, Prop 15 would generate $8b - $12b per year. This new revenue would primarily be dedicated to education funding.