Budget & Taxes (Sales Tax)

Existing sales and use tax laws, among other things, impose a tax on retailers measured by the gross receipts from their sales of tangible personal property sold at retail in this state. The Sales and Use Tax Law makes certain sellers of tangible personal property consumers, and not retailers, of the tangible personal property they sell, including, until January 1, 2026, an all-volunteer fire department, as defined, if the profits are used solely and exclusively in furtherance of the purposes of the all-volunteer fire department, as prescribed. This bill would extend the sunset described above until January 1, 2031. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. The bill also would include additional information required for any bill authorizing a new tax expenditure. The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws. Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions. This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill. This bill would take effect immediately as a tax levy.

Existing law authorizes various local governmental entities, subject to certain limitations and approval requirements, to levy a transactions and use tax for general or specific purposes, in accordance with the procedures and requirements set forth in the Transactions and Use Tax Law, including a requirement that the combined rate of all taxes that may be imposed in accordance with that law in any county not exceed 2%. This bill would authorize the San Luis Obispo Council of Governments, by an ordinance adopted by the council, to levy a tax pursuant to the Transactions and Use Tax Law at a rate not to exceed 1%, for general and special purposes, subject to voter approval on or after January 1, 2026, and before January 1, 2032. The bill would authorize the board to exceed the 2% limit described above to impose the retail transactions and use tax. This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Luis Obispo.