City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: November 17, 2025
Report #:2501-4034
TITLE
Q2 CY 2025 Sales Tax Digest (April-June 2025)
ANALYSIS
This report transmits information regarding the City of Palo Alto’s sales tax receipts for the second quarter (April to June) 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 7.7%
• San Francisco Bay Area: decreased by 2.5%
• California statewide: decreased by 2.5%
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 41.6%; represents 12.7% of total sales tax • Transportation – New autos: decreased by 32.2%; represents 11.7% of total sales tax These two segments account for over 20% 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 (Q2 2024 and Q2 2025) (Attachment A, p. 4)
• City share: decreased from 6.3% to 6.1%, or 20 basis points. • Total County pool: increased $0.1 million, from $1.6 million to $1.7 million Over the most recent four quarters, the City received approximately $6.6 million from the County Pool, representing about 19% of the City’s total sales tax revenue of $34.2 million during that period.
ATTACHMENTS
Attachment A: 2025 Q2 Sales Tax Digest Summary
APPROVED BY:
Lauren Lai, Administrative Services Director