West Covina : BKK Challenges City Taxes

BKK landfill operators have upped the stakes in their legal battle with West Covina by claiming the city has no right to tax the dump, the town’s biggest taxpayer.

The two sides are battling over when the landfill must close.

BKK officials asked in a claim filed with West Covina on Oct. 1 that the city refund nearly $4 million in business license taxes BKK paid between Oct. 1, 1992, and Oct. 1 of this year. City Atty. Betsy Hanna said she will recommend that the city reject the claim because it has no merit.

BKK attorney Gary Kovall called the business license tax a “special tax” the city has no legal right to collect because the 1978 ordinance adopting it was subject to a two-thirds vote of the people under Proposition 13. He said state law prevents BKK from asking for more than a year’s worth of taxes back.

The City Council adopted the ordinance creating the tax five days before California voters passed Proposition 13, Kovall said, but the ordinance would not have gone into effect until 30 days later--after the proposition became law. That, Kovall contends, means the business license tax--equal to 10% of what BKK collects annually in disposal fees--was subject to the provisions of Proposition 13.

City Atty. Hanna said the city’s business license tax is a general tax that bolsters the city’s general fund. A general tax, she said, takes effect immediately after it is adopted.