Arden Carmichael, Inc. v. County of Sacramento

In Arden Carmichael, Inc. v. County of Sacramento, 1 this court held that a fee imposed on nonprofit organizations by the County of Sacramento (the County) based upon a percentage of their gross receipts earned from bingo games violated article XIII, section 26, subdivision (d) of the state Constitution (hereinafter sometimes referred to as subdivision (d)). Subdivision (d) provides that a nonprofit organization “is exempt from any business license tax or fee measured by income or gross receipts that is levied by a county . . . .”

*510 In an effort to conform with the law, the County changed its fee structure. It now imposes a fee based upon a percentage of the prize payouts from the bingo games.

Plaintiffs, a group. of 34 nonprofit organizations that operate licensed bingo games within the County, brought this action challenging the County’s new fee structure: They argue that “[pjrize payouts . . . track the gross income [of the bingo operations] closely enough to be considered inextricably linked” and that a fee based thereon is therefore violative of the state Constitution’s prohibition against fees measured by income or gross receipts. Plaintiffs also argue that the…