Sales Taxes in the Golden State and a Quick Lesson on Prop. 13

Posted by The Govistics Team in Blog

California shoppers hoping to avoid relatively high sales taxes (see how California measures up to other states in terms of its general sales tax with max local surtaxes by viewing this summary table provided by Wikipedia) by opting to shop online can no longer do so through, effective September 15, 2012.

From the Los Angeles Times, September 23, 2011:

Saying it would save existing jobs and create new ones, Gov. Jerry Brown signed into law legislation to require and many other out-of-state Internet retailers to collect sales taxes on purchases by California customers.

Using Govistics, you can explore what kind of weight that sales and use taxes have on local budgets and attempt to measure the potential impact of this new state policy. In the City of Los Angeles, for example:

  • Total revenue in FY 2008 added up to $11.4 billion
  • 31% of total revenue was made up of taxes levied ($4 billion) – a larger chunk than any other revenue source
  • In that category, sales taxes made up 36% of all taxes levied ($1.4 billion), shadowed only by property taxes (45%). The other slices represented money generated from licenses issued and fees collected.

The revenue snapshot of L.A. on Govistics lets you drill down into categories, here showing you where most of the City of Angels' tax revenue comes from.

Some say the impact of 1978’s (much-maligned) Proposition 13 caused local governments in California to become more dependent on sales (and income) taxes for needed funds, evident in the screenshot above. As controversial as that measure has become, it is also regarded as a political third rail.

So, how to dig up more dough to pay for schools, infrastructure, public health initiatives, and a “500 billion pension time bomb” … without touching that third rail? Uncover new revenue sources! Hence, Governor Jerry Brown vs. Amazon. It remains to be seen how this will affect public budgets in the Golden State, but we at Govistics look forward to seeing what transpires.

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