Centex Real Estate Corp. v. City of Vallejo

This appeal challenges the validity of an excise tax enacted by the City of Vallejo by Ordinance No. 1058. Appellants, Centex Real Estate Corp., Davidon Homes and The Lusk Company, real estate developers, contend that the ordinance was enacted to circumvent the requirements of Government Code section 66000 et seq. which restrict the imposition of development fees and that the excise tax is in effect a prohibited fee. We conclude that the excise tax is valid and affirm.

Factual Background

On August 29, 1989, the City Council of the City of Vallejo (the City) adopted Ordinance No. 1058 which imposes a property development excise tax on developers as a condition of the issuance of a building permit. Appellants brought this action seeking a writ of mandate directing the City to rescind its ordinance and to refund taxes collected. They contended that the tax was in fact a development fee subject to the provisions of section 66000 et seq. and was therefore invalid. Following a hearing on the writ, the trial court denied appellants relief, finding that the City had the right to tax developers for the privilege of developing or using property and that the purpose of the tax was…