New Sales Tax Rates to Take Effect in Several Cities April 1

Cities in five California counties will see voter-approved sales and use tax rate increases take effect April 1, according to the Board of Equalization. The biggest jumps will be experienced by Palm Springs and Vallejo, as rates will go up a full percentage point.

And an increase is being implemented throughout Mendocino County, as the raise in the sales tax rate will affect each of the county’s four incorporated cities (Willits, Point Arena, Fort Bragg and Ukiah), as well as in the unincorporated areas of the county. Here is a chart of changes in the tax rates:

The Chronicle points out that “Vallejo’s 1-cent sales tax increase is expected to bring $10 million annually so the cash-strapped city can begin bringing back some services such as museum hours and special police services. The 1/2-cent increase in Fairfax would bring in about $200,000 and help balance the city’s budget.”

Pico Rivera and South Gate in Los Angeles County have the highest sales tax rates in the state at 9.75%.

The BOE points out the following:

  •  Retailers generally need to apply the new sales tax rates if they:
  • Operate within the taxing area (the city/county 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:
    • Have a business location in the tax area.
    • 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.

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