Support for the City Managers Sales Tax Working Group Recommendations
Background
Bradley-Burns Uniform Local Sales and Use Tax allocates 1% of the statewide sales tax to local jurisdictions.
Bradley-Burns tax for e-commerce transactions is currently based on point-of-sale – typically fulfillment or distribution centers.
This methodology shifts a disproportionate share of sales tax to jurisdictions with distribution centers from agencies without them.
City Managers Working Group Recommended Allocation
50/50 split of Bradley Burns sales and use tax generated from e-commerce transactions 50% to point-of-sale (warehouse/distribution center)
50% to jurisdiction where items are shipped to
Allows plus or minus 10% to allocation for flexibility when drafting legislation Five-year phase-in, after CDTFA implementation
County pool use tax will be directly allocated to jurisdiction where packages delivered Prospective changes – revenues from existing sales tax sharing agreements not subject to split
Results
483 cities studied:
255 projected to gain revenue
105 projected to lose revenue
123 lack sufficient data – likely neutral to minimal changes Sales tax allocation for Manteca projected to increase <10% Based on FY ’25 actuals, every 1% increase is an additional $200,000 allocation to Manteca – potentially up to an additional $2 Million allocation
Letter of support for recommended changes to Cal Cities Advocate for proposed change with other cities in the region that would benefit from a more equitable sales tax distribution for e-commerce transactions Recommendation
Thank you