City of Pomona v. Christian Fellowship Center

Opinion

KINGSLEY, J.

Defendant appeals from a judgment in favor of the city, holding valid a gross income tax on the operation of a “bingo” parlor. We reverse.

[252]

Defendant Christian Fellowship Center is a religious corporation. Pursuant to article IV, section 19, of the state Constitution, and section 326.5 of the Penal Code it operated, in the City of Pomona, during the years herein involved, bingo games, the proceeds of which were used to support its religious activities. The city has enacted an ordinance, imposing a graduated tax on the gross income from that activity. The sole issue before us is whether the state law preempts the field of taxation of bingo games. We hold that it does.

Prior to 1976, bingo, as a gambling game, was prohibited by section 19 of article IV of the state Constitution. An amendment of that section, approved by the voters in June 1976, added a subdivision (subd. (c)), to provide that “The Legislature by statute may authorize cities and counties to provide for bingo games,

but only for charitable purposes.”

(Italics added.) Pursuant to that constitutional authorization, the Legislature adopted section 326.5 of the Penal Code.

That section is a long statute, containing detailed rules as to the use of funds derived from bingo games. Consistent with the constitutional mandate, it expressly provides that such proceeds “shall be used only for charitable purposes” except as expressly provided in that section. The exceptions, as of the time herein involved, were the payment of prizes, rent, overhead and administrative expenses in amounts severely limited. The statute also allowed a municipality to impose a $50 annual license fee.

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The city here freely admits that the tax imposed by the ordinance here before us is not a tax permitted by section 326.5. Its contention here is that, as a chartered “home rule” city, it has a constitutional right to impose a revenue-intended tax unimpaired by any state legislation. That contention we reject.

The cases on which the city relies involve enterprises basically lawful per se, which may be conducted without constitutional or statutory permission, except such regulations as are involved in insuring against fraud and incompetence. Here, however, we deal with an enterprise basically unlawful, operating only because an express provision in section