City Council
Staff Report
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: August 18, 2025
Report #:2501-4029
TITLE
Sales Tax Digest Q1 (Jan-Mar) 2025
ANALYSIS
This report transmits information regarding the City of Palo Alto’s sales tax receipts for the first quarter (January to March) of 2025. Listed below are highlights from the report. Detailed discussion and data can be found in the attached City of Palo Alto Sales Tax Digest (Attachment A).
Regional and statewide sales tax - adjusted benchmark year (rolling four-quarter) (Attachment A, p. 2):
Palo Alto: decreased by 3.3%
San Francisco Bay Area: decreased by 3.3%
California statewide: decreased by 3.2%
Benchmark year comparisons reflect a rolling four-quarter view of economic activity, adjusted to exclude non-period-related payments.
City’s most significant activity – benchmark year (rolling four-quarter) (Attachment A, p. 1):
Business to Business – Leasing: decreased by 10.6%; represents 19.3% of total sales tax Transportation – New autos: decreased by 28.1%; represents 11.9% of total sales tax These two segments account for approximately 30% of Palo Alto’s total sales tax for the period and were the primary drivers of the overall decline.
County Pool - quarterly year-over-year comparison (Q1 2024 and Q1 2025) (Attachment A, p. 4)
City share: increased 0.1%, from 6.0% to 6.1%
Total County pool: increased $0.2 million, from $1.5 million to $1.7 million Over the most recent four quarters, the City received approximately $6.5 million from the County Pool, representing about 19% of the City’s total sales tax revenue of $34.1 million during that period.
ATTACHMENTS
Attachment A: 2025 Q1 Sales Tax Digest Summary
APPROVED BY: Christine Paras, Administrative Services Assistant Director