Has City of LA illegally collected $2 Billion in taxes

047rJack Humphreville, a regular contributor to City Watch LA is reporting that the City of LA has possibly collected more than $2 Billion from ratepayers, illegally.  Named as defendants in a few pending lawsuits, the city will have to prove the taxes were approved by the voters.  A review of the city municipal code will detail the actual amounts the city can collect along with how much they can go up.

Here are excerpts:

The first lawsuit, Ardon v. City of Los Angeles, was filed in December, 2009.  It alleges that the 10% Telephone Users Tax was an illegal tax, resulting in the collection of approximately $750 million between 2006 and 2008.  With interest, the potential liability to the City is more than $1 billion.

The second class action lawsuit, Patrick Eck v. City of Los Angeles, was filed in April, 2015.  It alleges that the undisclosed 8% Transfer Fee levied by the Department of Water and Power is an illegal tax.  This has resulted in the collection of over $1.25 billion from Ratepayers since the passage of Proposition 26 in November, 2010.  The plaintiff is requesting the elimination of the 8% Transfer Fee ($266 million for the Fiscal Year ending June 30, 2015) and the return of over $1.25 billion to Ratepayers.

Another lawsuit, Tyler Chapman v. City of Los Angeles, was filed in January, 2015.   It also involves the illegal 8% Transfer Fee.

Some cities municipal codes will have a rate that starts at one percentage but could go up to a certain threshold, if approved by council.  The City of Carson User Utility Tax Oversight Committee is also in disagreement over the rates they are paying and more importantly, how are they being spent.  Their UUT tax is set to expire in 2016.

Read the full Jack Humphreville article on

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