Tax Law

California Supreme Court Unanimously Strikes Down State Law Requiring Public Disclosure Of President Trump’s Tax Returns

This is not the first time that the California legislature failed to pass a law forcing President Trump to make his tax returns public.

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(Photo by Spencer Platt/Getty Images)

When it comes to getting President Donald Trump’s prized tax returns, some states are taking matters into their own hands. But the task is proving to be quite a challenge.

The California Supreme Court struck down Senate Bill 27, a bill passed and signed into law last summer which required all presidential candidates to submit their tax returns for the past five years to the California Secretary of State, after which the returns will be made public. This law was passed in response to President Trump’s refusal to publicly release his tax returns as prior candidates have done. It was to go into effect in time for the 2020 California primaries.

The decision to invalidate the law was based on state law. Article 2, Section 5(c) of the California Constitution states that the Legislature must provide for partisan elections for presidential candidates, including an open presidential primary which includes those the California Secretary of State determines to be recognized candidates throughout the nation (emphasis added).

The court reasoned that the law requiring the disclosure of tax returns would conflict with Section 5(c) of the California Constitution which was designed to prevent the Legislature from favoring “favorite son” candidates. Otherwise, the Legislature could make it difficult for Californians to vote for nationally popular or “recognized candidates” that the Legislature does not like.

This is not the first time that the California Legislature failed to pass a law forcing President Trump to make his tax returns public. A prior version of the tax return disclosure law was vetoed by then-Governor Jerry Brown in 2017. He was concerned that the law would allow the Legislature to demand all kinds of requirements and disclosures as a condition to appearing on the presidential ballot. This would in effect prevent popular candidates from appearing on the presidential ballot if the Legislature does not approve.

The California Supreme Court also addressed the potential slippery slope. During oral argument on the constitutionality of the tax return disclosure requirement, several skeptical justices asked what information about a candidate should and should not be disclosed as a condition to being allowed to campaign for president in California.

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Since the decision was based solely on state law, it did not address whether requiring presidential candidates to disclose tax returns in order to be placed on the state ballot violates the U.S. Constitution.

The justices of the California Supreme Court likely know that President Trump will not get any of California’s electoral votes in the 2020 presidential elections, and so their decision focused on the bigger picture, including the potential for a slippery slope as mentioned during oral arguments.

Other blue states that want to pass a similar law with the “real” purpose of forcing President Trump to disclose his tax returns should think about the unintended consequences. Some people might have legitimate reasons for not wanting to disclose where their income comes from or what deductions they take.

Also, thanks to the internet, even if one state can pass a law that forces presidential candidates to disclose their tax returns to be on the state ballot, it will effectively make the tax return available to everyone. So in the end, Congress will have to legislate on this issue. If Congress doesn’t act on the matter, the federal courts will have to decide whether the qualification clause in Article 2, Section 1, Clause 5 should solely determine who is eligible to run for president.

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Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at [email protected]. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.

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