Century Plaza Hotel Co. v. City of Los Angeles

By its taxpayers’ action (Code Civ. Proc., § 526a), plaintiff sought to enjoin defendants from the enforcement of ordinance No. 136,900 and for a ruling regarding validity of the ordinance, which was enacted by defendant city to become operative October 1, 1968. The parties stipulated to the few facts necessary to a decision and brief additional testimony was received, following which the trial court held the ordinance was valid. Plaintiff appeals.

The ordinance, a so-called “tipplers’ tax,” added section 21.5.03.1 to the Los Angeles Municipal Code, imposing an excise tax of 5 percent upon the purchase price of alcoholic beverages sold by a retailer for consumption on the premises where sold.

I. Does the Ordinance Infringe Upon the State’s Constitutional Right to Regulate Alcoholic Beverage Sales?

Appellant argues that the ordinance imposes a special local tax on the retail sale of alcoholic beverages and contends that, since there is no limit upon the amount of tax which could be imposed and it could be increased until virtually prohibitory, the effect is to regulate alcoholic beverage sales. Regulation of this type is reserved to the state. So goes the…