Sales and Use Tax
Sales Tax Basics
When consumers buy an item in a store, normally, an amount is added for sales tax on top of the purchase price. The sales tax is assessed as a percentage of the price. Retailers are taxed for the opportunity to sell tangible items in California. Exceptions include services, most groceries and medicine. Retailers typically pass this tax along to buyers.
The “base” sales tax rate of 8.25 percent consists of several components. The main increment is the state-imposed basic sales tax rate of 7.25%. The remaining 1% increment is for local government. This means if you buy an item for $10.00 and the cash register receipt reflects 83 cents for sales tax, then about 73 cents of the sales tax goes to the state —60 cents goes to the state general fund, 3 cents for state economic recovery bond repayment, and about 10 cents comes back to local governments (5 cents for counties to fund health social service and mental health programs and 5 cents for counties and cities to fund public safety services). 3 cents are disseminated back to fund roads maintenance and construction. The County & City Operations increment is currently 7 cents or 0.75%, 1% minus 0.25% (for state economic recovery debt bond repayment enacted in 2004).
Voters approved a ballot measure in 1993, Proposition 172, designating one-half percent sales tax to counties to fund local public safety programs. This distribution is based on the counties’ proportionate share of statewide taxable sales. Placer County dedicates this sales tax revenue to public safety functions: Sheriff 74.03%, District Attorney 12.36%, Probation 12.36% County Fire 0.40% and Emergency Services 0.85%.
Placer County Sales Tax Update
Q3 2017 Highlights
The Unincorporated Area’s receipts from April through June were 8.9% above the second sales period in 2016.
This quarter’s results exceeded expectations as the office equipment segment of the business and industry group reported a large increase in sales along with the recovery of previously misallocated taxes. The light industry segment also reported gains, mainly from other reporting adjustments.
Sales of new cars and off-road vehicles were up again this quarter while rising fuel prices pumped up gas station receipts.
Construction activity called for more material sales and kept contractors busier this period while restaurant activity was also brisk with the prior addition of 4 new dining venues adding to consumer choices.
Partially offsetting these gains were a number of reporting adjustments and two instances where taxes were misallocated to another jurisdiction which negatively skewed general consumer good results.
Net of reporting adjustments, taxable sales for all of Placer County grew 5.0% over the comparable time period; the Sacramento region was up 4.3%.
Third Quarter Receipts for Second Quarter Sales (April - June 2017)