SB 789 Update: Vacancy Tax Dropped, Reporting Mandate Added
SB 789 (Menjivar; D–Van Nuys) no longer includes a vacancy tax but now requires commercial property owners to report vacancy data—introducing new compliance burdens that could significantly impact owners, managers, and tenants.
What You Need to Know
SB 789 has been gutted to exclude its requirement for commercial property owners to pay a $5 per square foot fee for buildings vacant more than 182 days a year.
It now would require commercial properties to report vacancy details to the California Department of Tax and Fee Administration. Penalties will be given to properties that don’t comply.
How It Impacts You
Increased Administrative Burden: Property owners reporting detailed vacancy information to the California Department of Tax and Fee Administration adds new compliance responsibilities that may require additional staffing or resources.
Potential Financial Penalties: While the $5 per square foot vacancy tax has been removed, property owners could still face financial penalties for failing to comply with the new reporting requirements.
Regulatory Precedent: This reporting mandate could lay the groundwork for future vacancy taxes or regulations targeting commercial property owners, creating long-term uncertainty for the industry.
Stay Connected
We encourage members to provide real-world examples of how this would impact their businesses by emailing [email protected].
Stay connected with us on BOMA on the Frontline for updates on the fight against this bill.
