Los Angeles, Backers Defend Mansion Tax to Federal Appeals Court

A challenge to Los Angeles’ new tax on real estate sales and transfers worth more than $5 million doesn’t belong in federal court, the city and the tax’s proponents told the Ninth Circuit.

Property owners, led by Newcastle Courtyards LLC, are asking the US Court of Appeals for the Ninth Circuit to reverse a trial court ruling that their suit is barred by the Tax Injunction Act, which limits when federal courts can weigh in on state tax matters.

The trial court properly found that Measure ULA imposes a tax subject to the TIA because the city’s electors enacted the ...