Key tax and policy developments from November include a court decision on local tax authority, administrative forum dynamics, and emerging compliance requirements in climate disclosure and tax administration services.
Tax Litigation
Local Tax Measures Under Judicial Scrutiny
In Sacramento, a superior court blocked the City of Long Beach from accelerating a voter-approved sales tax increase, finding that adjusting the implementation timeline would disregard the express terms of the ballot measure. The ruling reinforces that local tax measures must adhere strictly to voter-approved language and timelines, underscoring judicial willingness to enforce procedural limits on municipal revenue actions.
Water District Fees Struck Down as Unconstitutional Taxes
The California Court of Appeal upheld a lower court’s finding that groundwater replenishment charges imposed by the Coachella Valley Water District were unconstitutional because they bore no reasonable relationship to benefits received. The decision ordered refunds totaling more than $13 million and emphasized that agencies must justify differential charges across geographic areas when they resemble taxes.
For businesses subject to utility, water, or special assessments, the decision highlights judicial scrutiny over fee structures that may mask tax-like effects without clear benefit allocations.
Regulatory and Compliance
Appeals Court Halts California Climate Risk Law
A federal appeals court granted an injunction against one of California’s climate reporting laws. The Chamber of Commerce and other business groups have challenged the laws on First Amendment grounds and have sought to block implementation of the laws while their lawsuit proceeds. (see California Energy Journal.)
Business Groups Petition U.S. Supreme Court to Pause California Climate Law
The U.S. Chamber of Commerce and other industry groups filed an emergency appeal on November 15, 2025, requesting the U.S. Supreme Court to put California’s climate reporting laws on hold while legal challenges continue, the AP reported. The laws take effect January 1, 2026. (see California Energy Journal.)
Revenue and Tax Policy
Budget Pressures Persist
Recent reporting underscored that although state revenues have increased—partly due to gains in capital and technology sectors—the uptick is insufficient to close California’s structural budget gap. Continued volatility in income and sales tax collections suggests policymakers may revisit revenue measures, tax incentives, and enforcement priorities in the 2026 legislative cycle. (see Dan Walters, “California sees revenue uptick, but not enough to erase its chronic budget deficit, CalMatters, November 19, 2025; Emily Hamann, “AI boom leads to windfall tax revenues – but no tech job growth for California,” State Affairs, November 26, 2025).
Property Tax
Renewed attention surfaced around proposals to revisit California’s treatment of inherited property under Proposition 19. There is a third campaign to repeal the inheritance portion of the proposition that raised property taxes. This is the third repeal campaign, with the first two in 2022 and 2024. “Fix Prop 19 to Save Our Children’s Future” must still receive enough signatures to make the November 2026 ballot.
Climate and Energy
Appeals Court Halts California Climate Risk Law
A federal appeals court granted an injunction against one of California’s climate reporting laws. The Chamber of Commerce and other business groups have challenged the laws on First Amendment grounds and have sought to block implementation of the laws while their lawsuit proceeds. Read more at the California Energy Journal.
Interior Offshore Oil Drilling Plan Includes Six Potential California Lease Areas
The Department of the Interior released a draft proposal to lease approximately 1.27 billion acres in the Outer Continental Shelf (OCS), including in six areas off the coast of California. The draft proposal, released on November 20, 2025, follows reports on a leaked draft of the plan earlier this month. Read more at the California Energy Journal.
Business Groups Petition U.S. Supreme Court to Pause California Climate Law
The U.S. Chamber of Commerce and other industry groups filed an emergency appeal on November 15, 2025, requesting the U.S. Supreme Court to put California’s climate reporting laws on hold while legal challenges continue. The laws take effect January 1, 2026. Read more at the California Energy Journal.