We’ve received much attention for our two recent reports comparing states on combined state and local sales taxes, and looking at major metropolitan area sales taxes. One state with much local 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. activity is California.
Earlier this year, residents of five California cities voted to raise their sales taxes, effective October 1. Spread across the state, the cities have cited fiscal emergencies. Since 1955, California cities can have local sales taxes, of up to 2%, and so long as two-thirds of the City Council and a majority of voters approve it. The state government’s fiscal woes have resulted in much raiding of funds previously earmarked as local aid.
- Calexico in Imperial County voted in June 60% to 40% to raise its sales 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. by a half-cent, from 8.75% to 9.25%, for 20 years.
- Cathedral City in Riverside County also voted in June 56% to 44% to raise its sales tax by a full percent, from 8.75% to 9.75%, for five years.
- Cotati in Sonoma County voted in April 60% to 40% to raise its sales tax by a half-point, from 9% to 9.5%, for five years. Voters had previously recalled a councilman that had refused to put the measure on the ballot, depriving it of its needed unanimous vote, and replaced him with a city planner.
- Rohnert Park, also in Sonoma County, voted in June 55% to 45% to raise its sales tax by a half-point, from 9% to 9.5%, for five years.
- Woodland in Yolo County, voted in June 55% to 45% to raise its sales tax by a quarter-point, from 8.75% to 9%, for four years.
Additionally, Davis in Yolo County voted 75% to 25% to extend for six years a half-cent sales tax set to expire at the end of 2010. Their sales tax will remain at 8.75%.
This across-the-board wins for sales tax increases is a turnaround from November 2009, when voters rejected three of five increases (approving a 0.25% increase in San Mateo and 0.5% in Gustine, after voters rejected a 0.75% increase the previous year), but rejecting a 0.5% increase in San Carlos, 0.5% increase in Ventura, and a full 1% increase in Salinas.
Five more cities have sales tax increases on the ballot this fall.
- Antioch in Contra Costa County will vote on raising its sales tax by half a point, from 9.25% to 9.75%, for eight years.
- Concord also in Contra Costa County, will vote on raising its sales tax by half a point, from 9.25% to 9.75%, for five years.
- Eureka in Humboldt County, will vote on raising its sales tax by half a point, from 8.5% to 9%, for five years.
- San Leandro in Alameda County, will vote on raising its sales tax by a quarter point, from 9.75% to 10%, for seven years. If it passes, San Leandro will be the first Northern California city to join Avalon, El Monte, Inglewood, Pico Rivera, and South Gate with a double-digit sales tax.
- Santa Monica in Los Angeles County, will vote on raising its sales tax by a half-point, from 9.75% to 10.25%, permanently. The City Council supports the tax unanimously although the Mayor opposes it.