The California Supreme Court has voted to review a business tax case from San Diego. However, the state's high court deferred action on Teyssier v. City of San Diego until the court decides a similar case from Los Angeles. In June, the Fourth District Court of Appeal ruled that San Diego's tax on rental residences was not subject to Proposition 218, the Right to Vote on Taxes Act of 1996 (see CP&DR Legal Digest, August 2000). The city assessed a rental unit business tax on all residential properties that are rented. The court held that Proposition 218 (Articles XIII C and XIII D of the state Constitution) only applies to taxes imposed as an incident of property ownership. The San Diego tax is a general tax based on use of the property, the court held. The property owners contended that Proposition 218, which was intended to close Proposition 13 loopholes, applied to any taxes relating to property ownership. The ruling appeared to conflict with Apartment Association of Los Angeles v. City of Los Angeles, 74 Cal.App.4th 681 (see CP&DR Legal Digest, October. 1999). In the Los Angeles case, the Second Appellate District struck down a tax levied on apartment owners to fund a slum-abatement program. The state Supreme Court accepted the Los Angeles case about one year ago and heard oral arguments in mid-October. The court will decide the Los Angeles Case before considering the San Diego case. The case is Edward Teyssier v. City of San Diego, No. S090271.