City of Laguna Beach
Resident/Non-Resident Analysis
Development Driven by Data
HdL ECONSolutions
120 S. State College Blvd., Ste 200
Brea, CA 92821
www.hdlcompanies.com
www.hdlcompanies.com • 714.879.5000
June 2025 City of Laguna Beach – RvNR Analysis 1
Overview
Incorporated in 1927, Laguna Beach is a charming beach community located along the Pacific Ocean in Orange County, California. It is bordered by the City of Newport Beach to the west, City of Aliso Viejo and City of Laguna Woods to the east, and the City of Irvine to the north. The city one of many beach front cities along Pacific Coast Highway. It is also easily accessible from California State Route 133. Known for its stunning coastal scenery, vibrant arts scene, and commitment to environmental preservation, Laguna Beach offers a unique blend of natural beauty and cultural richness.
The City of Laguna Beach is a renowned destination for food lovers, offering a variety of famous casual dining restaurants that provide unique dining experiences, including The Cliff, Starfish Asian Coastal Cuisine, and Nick's. For those seeking fine dining, Laguna Beach boasts exceptional options like Las Brisas, Selanne Steak Tavern, and Sapphire Cellar Craft Cook, which not only serve exquisite cuisines but also stand as local landmarks. Additionally, the city features a variety of independently owned quick-service restaurants, as well as well-known chain establishments like Jack in the Box, Domino’s Pizza, and Starbucks.
The walkable downtown area located across from the main beach is the heart of Laguna Beach. This vibrant area is filled with creative boutiques, bars, restaurants, recreational parks, and facilities for a variety of interests. Laguna Beach is also known for its air-oriented events and festivals, which draw visitors on a national level. Some of the annual events, include the Pageant of the Masters, Festival of Arts, Sawdust Art Festival, and Art-A-Fair. Below is a summary of the market analytics, for the City of Laguna Beach and trade area within a 15-minute drive.
City of Laguna Beach 15-Minute Drive Time
Population 22,921 100,986
Households 10,716 44,100
Average HH Income 238,684 207,903
Daytime Population 26,529 95,669
There are 1,865 established businesses in the City of Laguna Beach that employ approximately 10,209 employees in specialized industries such as Retail Trade, Health Care & Social Assistance and Accommodation & Food Services (Source: SiteSeer Demographics). The largest industry category in the City of Laguna Beach is Retail Trade, providing employment to approximately 15.0% of the total workforce within the city.
Legend
City of Laguna Beach
Laguna Beach- Broadway
15-minute drive time
www.hdlcompanies.com • 714.879.5000
June 2025 City of Laguna Beach – RvNR Analysis 2
Non-Resident Spending Summary
The City has requested an estimate of the approximate amount of sales and use tax revenue generated by residents versus non-residents. Hereafter, individuals and businesses residing and located within the city will collectively be referred to as residents. While individuals and businesses residing and located outside of the city will collectively be referred to as non-residents.
The table below summarizes the results of the analysis based on actual sales tax revenue in 2024 (Calendar Year) and TUT revenue estimate for 2024-2025 (Fiscal Year), it also reflects the percentages of sales tax estimated from non-residents for the seven major industry groups. The 1% Bradley Burns tax is based on where the sale is negotiated or the place where the order is taken, while Transactions and Use Taxes (TUT) are applied in accordance with where purchased goods are delivered or placed into use.
In summary, HdL companies estimates that 55.2% of the 1% Bradley Burns Sales Tax in 2024 is generated from non-residents, while the potential percentage of a 1% TUT paid by non-residents is estimated at 37.1%.
Economic Segment
Bradley Burns 1%
Sales & Use Tax
Transactions & Use
Tax (TUT)
Autos & Transportation 62.7% 2.5%
Building & Construction 29.3% 9.7%
Business & Industry 47.3% 6.4%
Food & Drugs 25.3% 25.3%
Fuel & Service Stations 19.0% 17.6%
General Consumer Goods 35.9% 24.8%
Restaurants & Hotels 74.3% 66.3%
Estimated Average Non-Resident
Generated Revenue 55.2% 37.1%
Estimated % of Sales Tax Revenue Generated from Non-Residents The figures shown above were obtained utilizing a variety of methodologies customized to each economic segment. These methodologies consider the mix of businesses located in the City, per capita sales within the City of Laguna Beach versus the per capita sales across Orange County, as well as factoring average income population and trade area daytime- population for the designated trade areas previously described as a percentage of those categories within the City. The findings for each economic segment that led to the conclusions are listed below.
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June 2025 City of Laguna Beach – RvNR Analysis 3
Autos & Transportation
The Autos & Transportation sector accounted for 4.8% of the Bradley Burns Sales Tax revenue for the City of Laguna Beach. When comparing per capita sales in 2024, the City of Laguna Beach produced lower per capita sales level than Orange County. Without many autos related retailers in the city, non-residents are not purchasing vehicles as well as auto-related items in large quantities within the City of Laguna Beach. This is also supported by a review of the Consumer Demand & Market Supply Assessment as the Autos & Transportation segment reflects that the businesses located within the City of Laguna Beach supplied less than consumer demand. The combined information further suggests that the car dealerships, automotive services, and automotive retailers located within the city’s limits are not providing for non-residents and are not meeting the consumer demand, in a meaningful way. An estimated 62.7% of the sector’s 1% Bradley Bruns Sales Tax revenue is generated from non-residents.
It is also important to keep in mind that most of the TUT revenue is generated by residents and local businesses when they purchase and register a vehicle at an address within the City of Laguna Beach. With that, nonresident purchases of vehicles in Laguna Beach are not subject to the TUT. However, TUT would apply to sales of auto supplies, repairs, tires, and auto related items which would include transactions to non-residents. The estimated percentage of a TUT revenue in this sector generated by non-residents is estimated much lower at
2.5%.
Building & Construction (B&C)/ Business& Industry (B&I) The Building & Construction and Business & Industry sectorstogether generated 6.7% of city’stotal 1% Bradley Burns Sales Tax in 2024. Most sales within these sectors rely on Business-to-Business transactions. The methodology used to estimate revenue from non-residents relies on adjustments to both segments’ top sales tax producers, which were used as a relative sampling of sales tax generation within these industry groups. The top 10 businesses in the Building & Construction(B&C) group accounted for 99% of the revenue generated by the B&C sector in 2024, while 59% of the revenue generated in the Business & Industry (B&I) group was attributed to its top 20 sales tax producers.
The City of Laguna Beach produced lower per capita sales than Orange County’s per capital sales level in both the Building & Construction(B&C) and Business & Industry(B&I) sectors, similar to autos this is due to the small number of retailers in this segment. A review of the Consumer Demand & Market Supply Assessment reflects that the establishments in both B&C and B&I segments supplied less than consumer demand. The combined information suggests that the businesses in this sector within the City of Laguna Beach are not providing for non-residents and are not meeting the consumer demand.
The estimated 1% Bradley Burns Tax for the Building & Construction and Business & Industry sectors generated from non-residents is 29.3% and 47.3% respectively. Applying the same methodology used for the 1% Bradley Burns Sales Tax estimate to a potential TUT for B&C & B&I sectors, it is estimated that 9.7% and 6.4% of the revenue would be generated from non-residents, respectively. www.hdlcompanies.com • 714.879.5000
June 2025 City of Laguna Beach – RvNR Analysis 4
Food & Drugs
The Food & Drugs sectors accounted for 6.2% of the Bradley Burns Sales Tax revenue for the City of Laguna Beach. Analysis of the Food & Drugs segment indicates that the City of Laguna Beach produced higher per capita sales than Orange County’s per capita sales level at grocery and drug stores. However, a review of the Consumer Demand & Market Supply Assessment and the Grocery & Drugs segment reflects that the establishments in this business group within the City of Laguna Beach supplied less than consumer demand.
The combined information suggests that businesses are providing for non residents but not enough to meet the consumer demand entirely.
It should be noted that generally only about 20% to 30% of grocery store sales are taxable and the receipts in this group are generally very close to 1:1 ratio between the Bradley Burns and a TUT tax. Therefore, an estimated 25.3% of the sector’s revenue is generated from non-residents for the Bradley Burns Sales Tax and the estimated percentage for a potential TUT generated from non-residents is 25.3%.
Fuel & Service Stations
The Fuel & Service Station (F&SS) sector generated 4.0% of the Bradley Burns Sales Tax revenue for the City of Laguna Beach and the city produced lower per capita sales than Orange County’s per capita sales level. In addition, reviewing the Consumer Demand & Market Supply Assessment, the Fuel & Service Stations segment reflects that gasoline stations supplied less than consumer demand for the city. The combined information suggests that non-residents are not purchasing auto fuel in large quantities from the service stations located within the city’s limits in Laguna Beach and gas stations located within the city’s boundaries are not providing enough to meet the consumer demand. The estimated percentage of non-resident sales for the 1% Bradley Burns Sales Tax is 19.0% and the estimated percentage for any potential TUT from non-residents is 17.6%.
General Consumer Goods
The General Consumer Goods sector accounted for a substantial 28.0% of the Bradley Burns Sales Tax revenue for the City of Laguna Beach. Within this sector, Women's Apparel contributes 10%, Art/Gift Novelty Stores lead with 27%, Jewelry Stores follow at 20%, and Home Furnishings provide 17%. Collectively, these categories generated 74% of the General Consumer Goods economic sector.
The city produced significantly higher per capita sales than Orange County’s per capita sales level, suggesting that non-residents are purchasing general consumer goods from retail businesses located within the city boundaries of Laguna Beach. This is supported when reviewing the General Consumer Goods segment of the Consumer Demand & Market Supply Assessment as it reflects that the businesses located within the city’s boundaries supplied more than consumer demand. The combined information suggests that the retailers located within the City of Laguna Beach are providing for non-residents and are meeting the consumer demand. An estimated 35.9% of the sectors 1% Bradley Burns Sales Tax revenue is generated from nonresidents. Applying the same methodology used forthe 1% Bradley Burns Sales Tax estimate to a potential TUT, it is estimated that 24.8% of the revenue would be generated from non-residents from a potential TUT. www.hdlcompanies.com • 714.879.5000
June 2025 City of Laguna Beach – RvNR Analysis 5
Restaurants & Hotels
The Restaurants & Hotels sector accounted for a significant 49.9%, close to half of the Bradley Burns Sales Tax revenue for the City of Laguna Beach. Within this sector, Causal Dining category contributed 43%, Hotel/Motel category generated 29% and Fine Dining category contributed 16%. Collectively, these categories generated 88% of the sales tax revenues for the Restaurants & Hotels sector. This is not surprising considering that Laguna Beach is a highly sought after tourist and destination location.
An analysis of the Restaurants & Hotels sector reveals that the city achieved significantly higher per capita sales levels compared to Orange County, approximately three times the county's per capita sales level. This suggests that non-residents stay and dine at the businesses located within the city’s boundaries.
An analysis of the Restaurants & Hotels segment in the Consumer Demand & Market Supply Assessment indicates that businesses located within the city’s boundaries supplied more than consumer demand. The combined information suggests that business establishments located in the City of Laguna Beach are focused on providing for non-residents and are meeting the consumer demand. An estimated 74.3% of the sectors 1% Bradley Burns Sales Tax revenue is generated from non-residents. Applying the same methodology used for the 1% Bradley Burns Sales Tax estimate to a potential TUT, it is estimated that 66.3% of the revenue would be generated from non-residents from a potential TUT.
Conclusion
Local tax is the general term for sales and use taxes imposed under the Bradley Burns Uniform Sales and Use Tax Law. Please keep in mind that while per capita sales comparison is one of the methods that is being used to measure the ‘the City vs County’ trends, HdL also uses a methodology that is based on characteristics unique to each economic segment as well as examining the demographic data and the Consumer Demand and Market Supply Assessment for a drive-time trade area.
Laguna Beach's blend of stunning landscapes, vibrant art scene, and diverse outdoor activities make it a prime destination, enticing visitors to explore, relax, and enjoy its activities and culinary delights. Nonresidents living around the city or visiting Laguna Beach are producing and increasing sales tax revenue in all categories, particularly in Food & Drugs, General Consumer Goods and Restaurants & Hotels where the city’s per capita sales levels are higher than Orange County’s per capita sales levels. In conclusion, the estimated percentage for sales tax revenue generated by non-residents in the City of Laguna Beach is 55.2% for the 1% Bradley Burns that is based on actual sales tax revenue in 2024 and a potential TUT generated by nonresidents based upon a revenue estimate for 2024-2025 is estimated at 37.1%.
City of Laguna Beach
Estimate for Transactions Tax/District Add-on Sales Tax – April 2025 The following district tax estimate was devloped using comparisons of active voter approved transactions tax overrides of comparable juridictions within the region. Per-capita figures at the countywide, statewide and regional levels were all considered when projecting and adjusting certain categories.
FY 2026-27 Projection
Major Industry Group Local Tax 1.00%
Autos/Transportation $199,000 $829,000
Building & Construction $225,000 $260,000
Business & Industry $215,000 $630,000
Food & Drugs $347,000 $347,000
Fuel/Service Stations $238,000 $243,000
General Consumer Goods $1,330,000 $2,280,000
Restaurants/Hotels $3,130,000 $3,146,000
Transfers & Unidentified $22,000 $87,000
State & County Pools $1,083,000
Total $6,789,000 $7,822,000
District Tax / Local Tax Ratio 115%
NOTE – Transactions tax estimate is based on the Bradley-Burns Local (1%) projection for FY 2026-27 prepared Jan. 2025. The above figure is before administration fees.
Functional Differences: Bradley Burns (1%) local tax vs Voter Approved District Tax Traditionally, local tax is allocated based on an origin methodology where tax is allocated based on the place-of-sale. In other words, where the business is located. Voter approved district taxes are allocated on a destination methodology where tax generally follows the buyer. Traditional brick & mortar retailers, restaurants, and service stations will continue to generate a proportional amount of district tax compared to their normal local tax reporting. Below highlights the most common and notable differences in respect to the two tax sources.
Local Tax District Tax
Vehicles Dealership (place-of-sale) District of vehicle registration Delivered Materials/Equipment Sales office, warehouse, county pool Destination of use (ship to location)
Online Sales Ship from location (fulfillment center
and/or county pool)
Destination of use (ship to
location)
Construction Contracts County Pool District of Jobsite location These functional differences create variations dependent on a jurisdiction’s tax base. An agency without auto dealerships typically experiences an influx of district tax revenue from that segment. Similarly, an agency heavy in industrial or warehousing sectors is likely shipping more products outside of the city, resulting in less district tax compared to their local tax revenues. These factors are all considered in the above estimate.