Council Member Robles - RevTax April 16 2021 PolicyCommitteeRevenue and Taxation
Policy Committee
April 16, 2021
League of California Cities │ www.cacities.org
League of California Cities │ www.cacities.org
Welcome and
Introductions
Chair: Lisa Middleton, Mayor Pro-Tem, Palm Springs
Vice Chair: Norma Martinez-Rubin, Mayor, Pinole
Cal Cities President and
Executive Director Message
President, Cheryl Viegas Walker, Mayor, El Centro
Cal Cities Executive Director, Carolyn Coleman
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Public Comment
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State Budget and
COVID-19 Fiscal Impact
Update
League of California Cities │ www.cacities.org
State Budget –May Revise Eve
•State windfall is $20 billion above projections
•Urgent budget actions already taken:
•$536 million for wildfire and forest resiliency
•$9.6 billion for direct COVID-19 impact support
•Golden State Stimulus -provide $600 checks to 5.7 million lower-
income Californians. ITIN holders are eligible.
•$2 billion to the California Small Business COVID-19 Relief Grant
program —small businesses can receive a grant up to $25,000.
•Tax cuts allowing businesses to deduct up to $150,000 in expenses
covered by the federal Paycheck Protection Program and federal
Economic Injury Disaster Loan funds.
•Two years of fee relief for tens of thousands of restaurants, bars, hair
salons, and other state license holders.
•$100 million in emergency financial aid for low-income community
college students.
•$24 million in emergency aid for farm workers required to
quarantine.
•$400 million in federal aid for state-subsidized childcare and
preschool providers.
State Budget –Senate Proposal
•State Senate “Build Back Boldly ” Plan released ahead of ‘May Revise’
•Limit ongoing negative impacts of COVID-19 crisis:
•Assist economically impacted Californians: rent, mortgage, utilities,
student debt.
•Address mental health challenges for students, workforce, and families.
•Provide additional direct stimulus relief to struggling Californians and small
businesses/nonprofits.
•Fill gaps in other federal stimulus programs to assist local governments,
schools, universities, and other programs [bold added].
•Fund critical and eligible infrastructure projects, including broadband
expansion, clean energy, and the Safe and Affordable Drinking Water
program.
•Augment General Fund investments for eligible purposes throughout the
budget.
•Highlight: $20 billion over five years for local homelessness interventions.
COVID-19 Fiscal Impact
Update
League of California Cities │ www.cacities.org
Projected Revenue Shortfall
•Cities face a $6 billion general revenue shortfall throughout the pandemic
and expected recovery period (March 2020-June 2022):
•51 percent is attributed to the decline in transient (hotel) occupancy
tax (TOT) revenue.
•28 percent of the shortfall amount is attributed to the decline in sales
tax revenue.
•Additional losses are attributed to declines in revenues from business
taxes and licenses, parking and admissions taxes and fees, property
transfer taxes, franchises etc. Includes road funds from state to cities.
•Property tax impacts are delayed 18-24 months and impact not yet fully
understood. May have additional significant negative impacts to a core
revenue source.
Projected Revenue Shortfall
Hotel
Lodging Tax
(TOT)
-51%
Sales &
Use Tax
-28%
Road Funds
from State
-6%
Business Tax &
Other…
City $ Losses
FY2020-FY2022
$6.0 Billion
Projected Revenue Shortfall
-$3,500
-$3,000
-$2,500
-$2,000
-$1,500
-$1,000
-$500
$0
2019-20 2020-21 2021-22Millions
Hotel Lodging Tax (TOT)Sales & Use Tax
Business Tax & Other Road Funds from State
Survey Results
23.70%
76.30%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%
Yes
No or Unsure
Will the city be able to achieve a balanced budget in FY 21-22
without mitigating expenditures in response to COVID -19?
Survey Results
35.10%
64.90%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%
No
Yes
Has the city utilized unrestricted reserves to mitigate the
financial impact of COVID-19?
Preliminary Survey Results
53.90%
60.60%
60.60%
66.10%
72.80%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%
Defer/Delay Maintenance on Public Infrastructure
Draw down reserves
Defer/Delay Capital Projects
Cut Services/Programs
Hiring Freeze
Which of the following actions has the city done to mitigate revenue
impacts and expenditures in response to COVID -19 since the
beginning of the pandemic (March 2020)?
Survey Results
58.60%
62.90%
65.10%
66.70%
90.30%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%100.00%
Planning/Community Development
Public Works/Streets
Economic Development
Police
Parks and Recreation
Which city functions/services have been adversely affected by
COVID-19?*
Survey Results
56.20%
60.00%
61.10%
64.30%
65.90%
68.60%
80.50%
82.70%
82.70%
84.90%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%
Unfunded/new state mandates
Affordable Housing
Pension obligations (specifically)
Homelessness
Infrastructure Costs
COVID-19 expenditures
Business closures/sustained loss
Economic recovery (generally)
Continued closures of large venues/events/gatherings
Revenue shortfalls
What are key city challenges in the year ahead?
Survey Results
60.80%
68.00%
69.10%
69.60%
74.00%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%
Local business/employer assistance
Public Works/Streets
Small business grants
Parks and Recreation programs
Public Safety
If the city receives direct and flexible funding from the state and/or
the federal government, which programs/services would benefit?
American Rescue Plan
League of California Cities │ www.cacities.org
American Rescue Plan –Aid for Local
Governments
•Historic aid for all cities and counties (contrast to CARES Act)
•$65.1 Billion in Relief for Cities, Towns and Villages
•$8.3 billion for CA Cities
•$7.6 billion for CA Counties
•https://www.nlc.org/resource/stabilizing-local-government-
operations/
•$10 Billion Capital Project Fund: “to carry out critical capital
projects directly enabling work, education, and health monitoring,
including remote options, in response to the public health
emergency.”
•Will go to states, tribes and territories (working to make
available to cities).
Use of Funds
•Respond to the COVID-19 emergency and address its economic
effects, including through aid to households, small businesses,
nonprofits, and industries such as tourism and hospitality.
•Provide premium pay to essential employees or grants to their
employers. Premium pay cannot exceed $13 per hour or $25,000
per worker.
•Provide government services affected by a revenue reduction
resulting from COVID-19.
•Make investments in water, sewer or broadband infrastructure
Use of Funds –Bill Language
•For the provision of government services to the extent of
the reduction in revenue of such metropolitan city,
nonentitlement unit of local government, or county due to
the COVID–19 public health emergency relative to revenues
collected in the most recent full fiscal year of the
metropolitan city, nonentitlement unit of local government,
or county prior to the emergency;
•For most, this is FY 18-19.
•To make necessary investments in water, sewer, or
broadband infrastructure.
•Guidance likely on what will be deemed “necessary.”
Plain Restrictions
•Cannot use the funds towards pensions.
•Guidance needed on whether this includes employer
cost-share, OPEB, and 115 trusts.
•State and local governments could transfer funds to private
nonprofit groups, public benefit corporations involved in
passenger or cargo transportation, and special-purpose units
of state or local governments.
•Read to include special districts; joint-power authorities
Requirements and Timelines
•US Treasury Guidance and Requirements still being drafted!
•Have 60 days from passage on March 11, 2021.
•Allocation amounts still being finalized.
•Cities/Counties will receive funds upon active certification (US Treasury).
•Ensure the entity has a valid DUNS number and an active SAM registration.
•Gather your city payment information, including:
•Entity Identification Number (EIN), name, and contact information
•Name and title of an authorized representative of the entity
•Financial institution information (e.g., routing and account number, financial
institution name and contact information)
•Funds distributed to cities and counties by Treasury within 60 days of enactment
(March 11).
•Disbursements will be in two installments “tranches” (12 months apart).
•All funds must be used by December 1, 2024.
•Key to keep in mind for long term programs/investments/loans.
•Guidance needed on whether infrastructure projects must be completed by this date.
Requirements and Timelines
•Nonentitlement cities (<50,000 pop) will receive funds through the state
(Dept of Finance and State Controller).
•No later than 30 days after the state receives the funds; state can
request an extension but there are penalties.
•Cal Cities working to ensure a streamlined process.
•Periodic Reports to US Treasury
•Recipients of “payment made under this section shall provide to the
Secretary periodic reports providing a detailed accounting of the uses
of such funds by such metropolitan city, nonentitlement unit of local
government, or county and including such other information as the
Secretary may require for the administration of this section.”
•Reporting requirements still in development.
Tips
While the nation awaits guidance…
•Establish record of revenue loss, service impacts, local economic
impacts, community impacts, and recovery needs to support
reporting and narrative. This should also support you if Treasury
needs additional clarity on an expenditure.
•Plan to prioritize investments that fall clearly/plainly within eligible
uses.
•Direct COVID-19 response expenditures (PPE, sanitation, public
safety costs)
•Restoration of a core service impacted by revenue losses
•Small business grants, rent relief, direct cash assistance, utility/fee
relief, etc.
•Premium pay for essential workers.
•Keep in mind one-time vs. long-term commitments.
Legislative Update and
Action
League of California Cities │ www.cacities.org
League of California Cities │ www.cacities.org
Legislative Update
League of California Cities │ www.cacities.org
League of California Cities │ www.cacities.org
Sales Tax Exemptions and Exclusion Bonanza
AB 217 (Valladares) Sales and Use Taxes. Exemption. Tax
Holiday. School Supplies.
•Sales exemptions for a whole list of school supplies for a single
back-to-school buying season (July 30-August 1, 2022)
•Oppose; if measure is heard.
AB 607 (Arambula) Sales and Use Taxes: Exemptions: Blood
Screening.
•Provides 5-year SUT exemption for licensed blood bank
equipment and supplies.
•Oppose; if measure is heard.
League of California Cities │ www.cacities.org
Sales Tax Exemption and Exclusion Bonanza
AB 879 (Rubio) California Tax Amnesty and Revenue Recovery
Act.
•Requires the California Department of Tax and Fee Administration
(CDTFA) to open a penalty free payment window from February 2022
and March 2022 to incentivize payment of taxes.
•May be beneficial to close tax collection gaps –“tax gap”.
•May be duplicative of existing CDTFA authority.
•Watch; engage with CDTFA. Awaiting clarity from author whether she
intends to include sales and use taxes.
AB 906 (Carrillo) Zero-emission trucks: tax and fee
exemptions.
•Provides a sales tax exemption to zero emission heavy duty trucks.
•Exempts these vehicles from the vehicle license fee, as well.
•Exempts these vehicles from registration and weight fees.
•Oppose; if measure is heard.
League of California Cities │ www.cacities.org
Sales Tax Exemption and Exclusion Bonanza
AB 1121 (Rodriguez) Sales and Use Taxes: Emergency Preparation Items.
•Exemption for a host of emergency preparedness items during the last
week of June for the next two years.
•Oppose; if measure is heard.
SB 542 (Limon) Sales and Use Taxes: Heavy-Duty Zero Emission Trucks
•Reduces the vehicle license fee and sales tax on new medium-and heavy-
duty trucks zero-emission trucks to the level that would be imposed on an
equivalent new diesel or gasoline truck.
•Neutral if author removes local taxes and fee exemptions;
author/sponsors have committed to remove local impact.
SB 771 (Becker) Sales and Use Taxes: Zero Emission and Hybrid Vehicles
Exemption
•Applies to full and hybrid electric vehicles valued under $25,000.
•The state has rebate and other incentive programs that should support
adoption of these vehicles.
•Oppose; if measure is heard.
League of California Cities │ www.cacities.org
Team Soda vs. Team Pop
AB 1163 (Nazarian) Local Government: Taxation: Prohibition:
Groceries.
•“Soda Tax”
•Restores local authority to tax carbonated and noncarbonated
nonalcoholic beverages
•Cal Cities opposed authorizing statute (AB 1831, 2017)
•Threats of a ballot measure restricting local taxation authority,
reducing fee authority and increasing tax vote thresholds still loom.
•This measure has not been set for hearing; if measure is pursued this
year, an update and discussion should be had at the June meeting.
League of California Cities │ www.cacities.org
Fee Collection: Online Sales
AB 1402 (Levine) Marketplace Facilitator: Fee Collection.
•Expands the online sales tax collection framework, installed after
Wayfair, to include any fees that should be collected on sales.
•Fees include: California Tire, Lead-Acid Battery, Lumber Assessment,
and eWaste.
•Neutral
League of California Cities │ www.cacities.org
Property Tax Office
SB 219 (McGuire) Property Taxation: Delinquent Penalties and Costs:
Cancellation: Public Health Orders.
•Provides tax collectors authority and clarity to provide penalty relief to
taxpayers who are delinquent because of economic hardship because of
shelter in place orders. Taxpayers must pay principal to receive penalty
relief.
•Support
SB 539 (Hertzberg) Proposition 19: Intergenerational Transfers
•Implements Proposition 19 and clarifies law where responsibilities,
documentation, and oversight were unclear.
•Watch for any negative changes for cities to Proposition 19.
AB 1146 (Cervantes) Small Business Rent Forgiveness and Tax Relief
•Establishes framework for counties to optionally implement local rent
forgiveness and tax relief programs through local tax credits to be
reimbursed by state grants funds.
•Fate of measure uncertain given ARP restrictions on state tax cuts
•Engage with author; stakeholders to prevent local tax cuts not approved
by city councils and county boards of supervisors.
League of California Cities │ www.cacities.org
Diners and Dives
AB 1181 (Nguyen) Local Restaurant Fee Prohibition and Refunds
•Prohibits cities/counties from imposing or collecting license fees from
restaurants from January 1, 2020 through 2021. Also, requires full
refund of any collected fees.
•Particularly concerned about the costs of liquor licenses/health
permits.
•Coalition Oppose. Bill not set for hearing.
League of California Cities │ www.cacities.org
Stay a while Short-Term Rentals
SB 60 (Glazer) Ordinance Violations
•Allows cities to impose scaling fines up to $5,000 for ordinance
violations.
•Sponsored by City of Orinda following deadly Halloween AirBnB
shooting.
•Pending support; seeking clarification that measure applies to short-
term rentals not traditional hotels.
League of California Cities │ www.cacities.org
EIFD, CRIA, 123
SB 696 (Allen) Enhanced Infrastructure Financing Districts (EIFDs)
Powers
•Provides EIFDs with powers to acquire property and utilize eminent domain.
─Similar to powers provided to Community Revitalization and Investment
Authorities (CRIAs).
•Explicitly allows the state to participate in EIFD and contribute state
resources.
•Watch; may not move this year.
League of California Cities │ www.cacities.org
EIFD, CRIA, 123
SB 780 (Cortese) EIFD and CRIA Improvements
•Provides several revisions to the EIFD and CRIA laws intended to further
incentivize their use and attract investors.
•Removes 10 year protest provision that threatens the viability of the
district each decade and has scared away investors.
•CALED sponsored; technical assistance provided by Cal Cities.
•Support.
League of California Cities │ www.cacities.org
Links
Sales Tax Bills
Property Tax Bills
Other Taxes, Fees, Charges, Misc. Bills
EconDevelopment Bills
All RT Interest Bills
http://www.californiacityfinance.com/
League of California Cities │ www.cacities.org
Legislative Action
League of California Cities │ www.cacities.org
League of California Cities │ www.cacities.org
SB 555 (McGuire) Online Short-Term Rental Facilitator Program
Summary
•Provides an opt-in program for cities to delegate short-term
rental Transient Occupancy Taxes (TOT) collection authority
to CDTFA
•Requires short-term rental platforms to register with CDTFA
and collect TOT
•Potentially broadens the collection base
•Allows cities to opt-out
•Cities that opt-in share proportional costs of administration
•Cities must process any refunds
League of California Cities │ www.cacities.org
SB 555 (McGuire) Online Short-Term Rental Facilitator Program
Staff Concerns and Comments
In alignment with existing Cal Cities policy, staff remains
concerned that the adoption of the proposed framework
could result in:
─Less effective and transparent TOT collection,
─The termination of existing and future voluntary collection
agreements, and
─Has the potential to allow future state involvement in local
regulatory authority.
League of California Cities │ www.cacities.org
SB 555 (McGuire) Online Short-Term Rental Facilitator Program
Issues
•Imprecise and incomplete application/collection of local
taxes by platforms
•Insufficient data sharing does not provide proper audit
controls –for CDTFA or cities.
•Potentially high administrative costs
•Bifurcated local/state TOT collection issues (hotels/short-
term rentals)
•Broader concern of allowing state to potentially erode local
control of TOT.
•Potential to provide legitimacy to otherwise incompliant or
unauthorized short-term rental units.
League of California Cities │ www.cacities.org
SB 555 (McGuire) Online Short-Term Rental Facilitator Program
Issues
•“(d)The department’s audit duties under this part shall be
limited to verification that the online short-term rental
facilitator complied with this part.
•(e)(1)The department shall make available to a requesting
local agency any information that is reasonably available to
the department regarding the proper collection and
remittance of a local charge of the local agency by an online
short-term rental facilitator.”
League of California Cities │ www.cacities.org
SB 555 (McGuire) Online Short-Term Rental Facilitator Program
Questions
•Would an optional collection program be helpful?
o If so, what protections would you like to see?
•Are existing vendors a better option to support cities with
collection?
o Host compliance, Muniservices, Harmari, Deckard
Technologies, HDL
•How do you weigh the potential benefit of increased TOT
collections with state intervention?
League of California Cities │ www.cacities.org
SB 555 (McGuire) Online Short-Term Rental Facilitator Program
Staff Recommendations
Staff recommends an oppose unless amended position.
Seek amendments to protect the option of voluntary
collection agreements, ensure CDTFA and contracting cities
have access to adequate platform information to ensure full
accounting of each rental property for proper collection,
provide that registered platforms also support the costs of
administration, clarify the protection of local tax rates, clarify
that this measure does not pre-empt any local short term
rental ordinances.
League of California Cities │ www.cacities.org
SB 792 (Glazer) Online Retailer Reporting
Summary
This bill would require retailers whose annual online sales
exceeded $1 million in the previous calendar year to track
and report to the California Department of Tax and Fee
Administration (CDTFA) the city or ZIP code where the
purchaser resides for each sale within the state that is
transacted online.
The bill would direct retailers to report this information on
the same schedule the retailer reports sales to the CDTFA.
League of California Cities │ www.cacities.org
SB 792 (Glazer) Online Retailer Reporting
Summary
•The bill would define “transacted online” as one
where both:
─The purchaser’s order and payment for the sale
and purchase of tangible personal property is
transacted and completed on an internet website
or web-based application.
─The purchaser’s order and payment for the sale
and purchase of tangible personal property is not
initiated by the retailer using the retailer’s
equipment at the retailer’s place of business.
League of California Cities │ www.cacities.org
SB 792 (Glazer) Online Retailer Reporting
City Manager Sales Tax Working Group
•In fall 2017, a working group of city managers, representing
a diverse array of cities, was convened by Cal Cities City
Manager’s Department to help Cal Cities identify internal
common ground on rapidly evolving e-commerce trends and
their effects on the allocation of local sales and use tax
revenue.
•After meeting extensively throughout 2018, the Group made
several recommendations that were endorsed unanimously
by Cal Cities Revenue and Taxation Policy Committee at its
January 2019 meeting and subsequent Board of Directors
meeting.
League of California Cities │ www.cacities.org
SB 792 (Glazer) Online Retailer Reporting
City Manager Sales Tax Working Group Recommendation
•“Request/Require CDTFA Analysis on Impacts of Sales Tax
Destination Shifts:
•After discussion of numerous phase-in options for
destination sourcing and allocation for sales taxes, the group
ultimately decided that a more complete analysis was
needed to sufficiently determine impacts. Since the two
companies most cities rely on for sales tax analysis, HdL and
MuniServices, were constrained to modeling with
transaction and use tax (district tax) data, concerns centered
on the problem of making decisions without adequate
information.”
•This aligns with the intent of SB 792.
League of California Cities │ www.cacities.org
SB 792 (Glazer) Online Retailer Reporting
Staff Comments
•SB 792 has the potential to productively move conversations
forward and examine more closely whether or not, or which,
changes are beneficial to cities across the state and the
communities we collectively serve.
•SB 792 does not make any substantive changes to sales tax
allocations which staff believes is a prudent approach while
discussion amongst city leaders is had.
League of California Cities │ www.cacities.org
SB 792 (Glazer) Online Retailer Reporting
Staff Recommendations
•Staff recommends a support position along with
continuing working with the author, relevant policy
committees, city managers, fiscal officers, and
CDTFA to ensure the most adequate and least-
burdensome collection as possible.
•Additionally, continue to work with the City
Managers Department of the League of California
Cities in furthering of actionable steps. Refer
proposed action(s) of the Department back to the
Revenue and Taxation Policy Committee.
Sales Tax Briefing and
Discussions (Part 2)
Michael Coleman, Fiscal Advisor, Cal
Cities, CSMFO
League of California Cities │ www.cacities.org
League of California Cities │ www.cacities.org
Existing League Policy
•The existing situs-based sales tax under the Bradley Burns
1% baseline should be preserved and protected.
•Tax proceeds collected from internet sales should be
allocated to the location where the product is received by
the purchaser.
Summary of Existing Policy and Guiding Principles
League of California Cities │ www.cacities.org
Existing League Policy
•Sales Tax Sourcing Rules: Support as League policy that point of
sale (situs) is where the customer receives the product. Specific
proposals in this area should be carefully reviewed so that the
impacts of any changes are fully understood.
•County Pool Use Tax Allocations: Support the League working with
the state California Department of Tax and Fee Administration to
update the county pool allocation process to ensure that more
revenues are allocated to the jurisdiction where the purchase or
first use of a product occurs (usually where the product is
delivered). Use Tax collections from online sales, including from
the South Dakota v Wayfair Decision, should be shifted out of
county pools and allocated to the destination jurisdiction whose
Bradley Burns tax applies and not throughout the entire county.
CaliforniaCityFinance.com The California Local Government Finance Almanac
League of California Cities Revenue and Taxation Policy Committee
April 16, 2021 Virtual Meeting
Michael Coleman
coleman@muniwest.com 530.758.3952
April 2021CaliforniaCityFinance.com
* For taxable sales in unincorporated areas,
the local 1%rate goes to the county.
City* 1.00
Co Transp 0.25
Prop172 0.50
Co Realign 1.5625
State GF 3.9375
Total Base 7.25 %
City
1%*State
Genera
l Fund
3.9375
%
County
Realign…
County
Transpo…
Propositi
on 172 …
Add-On
Transacti
ons &
Use
(varies)
+Add-on TrUTs …….
See Chapter 2.01 of the Municipal Revenue Sources Handbook
April 2021CaliforniaCityFinance.com
59
“Sourcing”
The rules used to determine the place of sale (the “situs”),
and therefore,
which tax rates are applied to a given purchase and
which jurisdictions are entitled to the local taxes generated
from a particular transaction.
In most cases, this doesn’t affect over-the-counter sales where the location
of the business and the location of receipt by the purchaser are the same.
April 2021CaliforniaCityFinance.com
Sales Tax
Use Tax
Transactions
Tax
Use Tax
60
April 2021CaliforniaCityFinance.com
64 TUT measures were approved November 2020
14 extensions of existing rates
50 new or increase rates. All majority vote general purpose except two:
1/8 cent SF Bay Area three county Measure RR tax for passenger rail
1/4 cent Sonoma County Measure DD tax for affordable housing
263 cities*have approved add-on sales tax rates (TUT)
33 counties have at east one countywide TUT
–including “self-help” transportation rates3 counties have rates that apply only in unincorporatia 61
April 2021CaliforniaCityFinance.com
City A
Retail Store
Seller’s
Place of
Business
Buyer
Receives
at ...
* ”Transactions and Use
Tax”
AKA “Add-On Sales Tax”
BrBurns
Sales
Tax
Tr.Use*
Tax
62
April 2021CaliforniaCityFinance.com
City B
Residence
or Business
Buyer
Receives
at ...
City A
Seller with In-State Presence
Warehouse
Sales Office
Seller’s
Place of
Business
* ”Transactions and Use
Tax”
AKA “Add-On Sales Tax”
BrBurns
Sales
Tax
Tr.Use*
Tax 63
April 2021CaliforniaCityFinance.com
City B
Residence
or Business
Buyer
registers
at …
City A
Dealership
Seller’s
Place of
Business
* ”Transactions and Use
Tax”
AKA “Add-On Sales Tax”
BrBurns
Sales
Tax
Tr.Use*
Tax 64
April 2021CaliforniaCityFinance.com
City B
Warehouse
Residence
or BusinessSales Office
Seller’s
Place of
Business
Buyer
Receives
at ...
Countywide pool
City D City E
County
City C
Out of State
BrBurns
Use Tax
Tr.Use*
Tax
Seller with Out-of-State Presence
65Exception: BB Use Tax on transactions of $500,000+ is sourced to
destination city,* not pool. Reduce this threshold to $50,000 (or other $).
CaliforniaCityFinance.com The California Local Government Finance Almanac
Michael Coleman
coleman@muniwest.com 530.758.3952
Nick Romo
nromo@cacities.org 916.658.8200
Legislative Representative,
Revenue and Taxation
League of California Cities
Questions?
League of California Cities│ www.cacities.org