March 16, 2011

San Leandro Sales Tax to Increase on April 1

As part of the Measure Z quarter-cent sales tax increase approved by San Leandro voters in November 2010, sales tax will increase from 9.75% to 10%, according to a press release from the California State Board of Equalization on March 16, 2011.

Opponents of the sales tax argued that San Leandro would have the highest sales tax in northern California if Measure Z passed, but sales tax increases in Union City and El Cerrito to 10.25% give those cities that distinction.

Revenue from the sales tax increase is not likely to have a big effect on the current fiscal year, which ends on June 30, but is estimated to generate $3 to $4 million in revenue for the next fiscal year. Some of that additional revenue will be offset by an increase of $852,000 increase in the City's CalPERS contribution next year and an increase of $490,000 in employee costs from new employee contracts that were approved in December 2010.

According to the press release:

Retailers generally need to apply the new sales tax rates if they:

  • Operate within the taxing area (the city with the new tax rate) and have merchandise sold and delivered within the area.

  • Operate outside of the taxing area but are engaged in business within the area and sell merchandise for use in the area.

  • Are engaged in business in the area. Retailers are considered to be engaged in business in the area if they either:
    • Have a business location in the tax area. o Deliver into the tax area using their vehicles.

    • Have an agent or representative in the area to make sales, deliveries, installations, or take orders.

  • Sell autos, boats, or aircraft to customers that register them within the taxing area.

  • Collect tax on lease payments from property used in the taxing area.

Posted by Mike Katz-Lacabe at March 16, 2011 12:06 PM | TrackBack
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