Tax Glossary

Generic term for a tax based on the payroll of a business. California's unemployment insurance tax is an example.

Amount per individual.

Movable property and equipment, as opposed to immovable property such as land and buildings.

A California estate tax enacted after the elimination of the inheritance tax in 1982. It is imposed up to the level of the maximum state inheritance tax credit allowed against the federal estate tax. It does not change the taxpayer's combined state and federal estate tax liability but collected a portion of the federal state tax, in effect, to California. Commencing in 2005, the federal credit for state death taxes was fully repealed. Therefore, the California estate tax is inapplicable.

Generic term for a tax levied as a percentage of the liability imposed by another tax. There are no California piggyback taxes.

Personal Income Tax

Interest of a lessee in government-owned property. Lessees pay property taxes related to possessory interests.

Tax structure or policy in which either persons with high incomes pay a larger percentage of their income in tax than persons with lower incomes or where persons with high incomes receive a smaller share of tax relief than persons with lower incomes.

A tax on all real and tangible property located in the state and not specifically exempt.

Legislative initiative that substantially modified the provisions of Propositions 4 and 98. (See Chapter 5 for details.)

Initiative constitutional amendment approved on the June 1978 ballot. Limited property tax rates to 1% of assessed value, limited the growth in assessed valuation to a maximum of 2% annually, placed restrictions on the imposition of new taxes. Added Article XIIIA to the Constitution.

Initiative constitutional amendment approved on the November 1996 ballot. Sets forth voter approval requirements for the imposition of special and general taxes by local governments. The application of Proposition 218 to certain existing local taxes is currently being litigated in the courts.

Initiative constitutional amendment approved on the November 1979 ballot. Imposed limits on allowable appropriation of tax revenues by state and local governments. Added Article XIIIB to the California Constitution.

Initiative statute approved on the November 1986 ballot. The measure was intended to require a popular vote for any new locally-imposed tax or any increase in an existing locally-imposed tax. It was embroiled in a legal controversy until December 1995, when the California Supreme Court upheld its constitutionality.

Initiative statute and constitutional amendment approved on the November 1988 ballot. Established minimum funding guarantee for schools and community colleges, allocated a portion of state revenues in excess of the appropriations limit to education.