On July 1, 2009, the sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. in Los Angeles County went up another half-point. Last November, voters approved Measure R with 67% of the vote. The measure imposed the half-cent sales tax for 30 years and also approved a series of transportation projects to be funded by the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. . The tax is the third half-cent sales tax for transportation in Los Angeles County, and is expected to raise $40 billion over its life.
(A side note: Measure R’s half-cent sales tax is expected to cost the average person just $25 per year. That low number illustrates how California’s sales tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. is full of exemptions. California has one of the narrowest sales tax bases in the country.)
The boost in sales tax rates is attracting attention, since there’s now a substantial disparity with neighboring areas. The Los Angeles Times noted that aside from five communities with local sales taxes, L.A. county has a 9.75% total sales tax rate (8.25% base state rate plus 1.5% in transportation taxes). Neighboring Orange, Riverside, and San Bernardino Counties have rates of 8.75%, and Ventura County is even lower at 8.25%. These rates, of course, reflect the statewide sales tax increase that went into effect in April.
Two Los Angeles County cities have the highest sales taxes in the state. Pico Rivera and South Gate consumers will now pay 10.75% on their purchases. (Google searching “South Gate corruption” is interesting reading.) Three other cities (Avalon, El Monte, and Inglewood) have rates of 10.25%.Share