While the stock market runs sales tax revenue in San Francisco has tripped, down 9 percent on a year-over-year basis (down 8 percent over the three months ended in September).
On a year-over-year basis, sales tax revenues have fallen more than 10 percent in seven of nine Bay Area counties with San Mateo and Santa Clara counties both dropping more than 14 percent.
UPDATE: As a plugged-in reader notes, apparently the San Francisco Business Times pulled the wrong data from the California Board of Equalization.
The Business Time’s headline has been changed from “Sales tax figures suggest Bay Area economy lagging again” to “Sales tax figures suggest Bay Area recovery continues.”
And while previously reporting a 9 percent year-over-year drop in San Francisco sales tax revenue, they now report an 8 percent increase (up 5 percent across the Bay Area).
∙ Dow Crosses 11,000 As Market Volatility (A.K.A. Skittishness) Wanes [SocketSite]
∙ Sales tax figures suggest Bay Area recovery continues [Business Times]
topic doesn’t seem too too relevant but i am liking this data. personally i have been trying very hard to avoid paying sales tax by:
– spending less
– buying as much as possible online
– buying nearly-new from craigslist
– buying certain high-ticket, low weight items out-of-state while traveling
any other ideas would be greatly appreciated.
Move to Vancouver Washington – no state income tax and, when shopping, cross the bridge to Oregon – no sales tax.
BTW, methinks the day of tax-free internet purchases is coming to an end. The government is desperate for revenue.
my sole proprietor business has been determined to be qualifed and subject to the Use tax– a tax on “tax free” purchases on the internet.
Now I have to file in accordance with “Mandatory Use Tax Registration for Servie Enterprises.”
Are you realtors subject to this?
All businesses are required to pay use tax on goods bought from out of state. If you get a seller’s permit then I don’t think you have to register … Or, you could always set up shop in New Hampshire, but I don’t think the weather would agree with you …
Do Realtors buy over $100k worth of goods from out of state? I doubt they buy anything …
Good news! I am a big proponent of starving the beast that is the local government. Frankly I am tired of our overpriced nanny government.
Who the heck wants to keep paying the salary and healthcare, and pensions of local government officials whose tasks consist of over-regulation and dictating what you can buy, eat, drink, and where to put your garbage cans?
Jimmy I think the $100,000 figure is a gross income number to see if a business is “qualified” to file the appropriate form. I buy nothing tthat qualifies for use tax unless due dilegence documents such as Sanborn Map copies, data listing etc are subject the regs.
What qualifies as “goods” ? digital copies of Sanborn maps, listing of historic addresses? I think not, but my account and I will decide in April.
All businesses are required to pay use tax on goods bought from out of state.
EVERYBODY (not just businesses) is required to pay use tax on goods purchased from out of state.
http://www.boe.ca.gov/pdf/pub79b.pdf
If you get a seller’s permit then I don’t think you have to register …
Only if the tax-free item purchased will be re-sold in the state (with state and local sales tax applied).
What qualifies as “goods” ? digital copies of Sanborn maps, listing of historic addresses? I think not, but my account and I will decide in April.
Only tangible goods are taxable. If the digital maps or the address listings are delivered electronically, then they are not taxable. If they are delivered on a CD or DVD, then they are taxable. All of my software is purchased as digital downloads for this reason.
A friend of mine is a professional photographer who used to provide his clients with the finished job on film and/or disks, until the BOE told him that sales tax would have to be applied to the entire job (not just the physical media). Now, he simply FTPs his work to his clients.
I do think that tax-free shopping from out of state is kind of a dumb idea. Instead of paying taxes, people pay shipping (or the shipping cost is absorbed into the price). What’s so great about that? It’s like the government is subsidizing extra fuel use.
Loopholes are bad policy.
Naw, the government would never subsidize oil consumption.
Al:
I don’t see your logic.
If I buy local, the local retailer will “restock” the item I bought and money will be spent (by the retailer) on fuel to get the item back in stock at their store.
If I buy tax-free out of state, there is still a fuel cost for shipping the item to me. However, since I did a cost analysis comparing the all-in cost of buying local (price + sales tax) versus buying out of state (price + shipping), I likely saved 5-20% on the out of state purchase. This gives me more cash, which is good for me and the economy as a whole.
All-in, I am willing to let the local retailer compete for my business, but I feel not obligation to support a business that is not price competitive. Darwinism at its finest.
Online sales aren’t “tax free.” Rather, online retailers are not required to withhold sales tax (i.e., make you pay up front) unless they have a retail location in that state. If sales tax is not withheld as part of your purchase, I believe that you’re supposed to report and pay the sales tax as part of your tax returns. If an audit reveals that you didn’t pay the tax, you could get hit with a back tax and penalties.
Darwinism at its finest.
I hope Darwin is posting from an ‘anonymous’ IP address.
The Business Times pulled the wrong data off the boe website. OOPS! They have now corrected the article (now titled “Sales Tax Data suggest Bay Area Recovery Continues”):
“The state’s best estimate for retail sales tax receipts suggests the economy is still soft in the Bay Area.
For the three months ended in this month, Bay Area jurisdictions got slightly more revenue from state distributions of sale tax revenue than they did in the same period in 2009. Distributions for the most recent three months were virtually the same as during the three months ended in September.
The average monthly payout to the nine Bay Area counties in the most recent three months rose 5.26 percent compared with the same period in 2009. Only two counties — Napa and Solano — saw the average sales tax revenue to their jurisdications fall compared with last year.”
JustLooking:
First, the out of state retailer also has to restock his warehouse, which you’ve ignored. The local retailer gets her products off a truck in bulk, which is probably more efficient than UPS delivering a 2-pound package by air (though not always, I’ll grant).
But that’s beside the point. If you pay tax and your neighbor doesn’t, that’s effectively a subsidy to your neighbor. It’s dumb to subsidize companies just because they’re from another state.
Consider a situation: two states with 8% sales tax. So the inhabitants, instead of buying locally, cross-import their products, since the shipping costs are only 4%. Hooray, they save 4%! But the local governments lose the entire 8%, and either make it up elsewhere or shut down services. And then much of that 4% goes to buying and burning oil, rather pointlessly, since they could have just gotten the same products down the street.
As such, the ‘no out-of-state sales tax’ policy is more or less a subsidy to FedEx/UPS to run more trucks/planes and burn more fuel, which is a really stupid subsidy, and even though I’ve taken advantage of it I won’t be sorry to see it go.
That said, it doesn’t seem like there’s any concerted effort to fix it. I can imagine that there will be a lot of interests lined up against it– FedEx, major online retailers, Nevada…
Looking through the chart, I’m struck by the HUGE YoY tax swings some of the local cities have had.
EL CERRITO Down 63.89% from $210,638 to $76,067
CUPERTINO Up 47.74% from $900,978 to $1,331,114
What could possibly explain these kind of YoY changes? Are people really spending 63% less in El Cerrito and 47% more in Cupertino? I remember “cash for clunkers” ended last September, so that could have skewed the tax collections a bit after it ended.
I read the description and I can see that-
“Revenue that cities and counties see from taxable sales each month is related — but not directly tied — to the overall volume of taxable sales.”
But these seem way out of range, and there are other outliers on the list. Is this just too little info to make any sense out of? Anyone know what is going on?
givemeabreak;
Every Realtor I know got a nasty little notice from the State Board of Equalization.
I’m sure it probably cost the State more to send out all those notices than it recovered.
That’s an odd result for El Cerrito since the surrounding towns have the same sales tax rate. It’s the same as Alameda County, Pinole, and Richmond at 9.75%. They put a ballot measure on for November to raise it to 10.25%. I’m guessing it’s from car sales, as you said, since El Cerrito Plaza’s dealerships are the probably the largest contributors.
Not sure what’s going on with Cupertino. Their numbers may drop over the next two years with HP moving out of town. I think HP is one of the top contributors to Cupertino’s sales tax, along with Apple, especially since both companies bring in a lot of hotel business and other commerce. Seagate moving from Scotts Valley will help soften the blow. It’d be funny if Cupertino’s increase is due to iPads (mostly joking).
Maybe my joke was right:
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/10/18/financial/f133852D40.DTL&tsp=1
Apple’s revenue for Q3 was off the charts, up 67% YOY, and some good chunk of that must be from California.