Sales & Use Tax
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 7.25% consists of several components. The main increment is the state-imposed basic sales tax rate of 6%. The remaining 1.25% increment is for local government.
This means if you buy an item for $10 and the cash register receipt reflects $0.73 for sales tax, then about $0.60 of the sales tax goes to the state minus $0.39 goes to the state general fund and about $0.21 comes back to local governments ($0.05 for counties to fund health social service and mental health programs and $0.05 for counties and cities to fund public safety services). $0.13 are disseminated back to fund roads maintenance and construction. The County and City Operations increment is currently $0.10 or 1%.
Sales Tax Revenue
Voters approved a ballot measure in 1993, Proposition 172, designating 1/2% 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:
- County Fire 0.40%
- District Attorney 12.36%
- Emergency Services 0.85%.
- Probation 12.36%
- Sheriff 74.03%
2018 Q4 Receipts (Q3 Sales) Highlights
The Unincorporated Area’s receipts from July through September were 15.5% above the third sales period in 2017.
Building and Construction led all gains with a 19% increase while fuel dealers saw a 6% gain and business/industry turned in a 5.2% increase. Increases in restaurant and hotels were entirely from a collection of late payments while autos/transportation declines came from a drop in new car sales.
Q4 receipts include reporting errors in the countywide use tax pool which will be adjusted at a later date.
Net of reporting adjustments, taxable sales for all of Placer County grew 7.1% over the comparable time period while the Sacramento region was up 4.3%.