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HomeMy WebLinkAboutMINUTES - 10242006 - C.38 3S TO: BOARD OF SUPERVISORS ����,�-�-��' Contra FROM: JOHN CULLEN, ;; ;- Costa County Administrator ;.; -- :ko� a coors'� ~' County DATE: October 24, 2006 SUBJECT: SITE SPECIFIC SALES TAX INFORMATION SPECIFIC REQUEST(S)OR RECOMMENDATION(S).&BACKGROUND AND JUSTIFICATION RECOMMENDATION: REQUEST the Board of Equalization (BOE) provide more detailed and accurate data on the Bradley- Burns local sales and use tax revenue administered by the BOE on behalf of local governments. APPROVE and AUTHORIZE the Chair, Board of Supervisors, to sign a letter to our Board of Equalization member, the Honorable Betty T. Yee, requesting assistance in securing this data. REQUEST members of our state legislative delegation support the County's request for better data. FISCAL IMPACT: Local governments reimburse the BOE for all costs associated with administration of Bradley-Burns revenues. Although the state currently requires taxpayers to file the more detailed data requested, the state does not pass that detail on to the local government. A modification of the Board of Equalization's computer system would be required to comply with this request. BACKGROUND: Sales tax is an essential element in financing local government services. For some jurisdictions, it can represent a large portion of general fund revenues, and it is one of the few revenue sources that can be expended without increasing rates or fees. As a result, local governments expend considerable energy attracting new retail investment, insuring that older retail areas remain viable, and balancing tax bases to optimize tax and job producing businesses. Unfortunately, effectiveness in maintaining a viable tax base is being hampered by a deficiency in the Board of Equalization's reporting of local sales and use tax revenues. Although the state requires taxpayers to file a detailed allocation by sub-outlet on Schedule C of their returns, the state does not pass that detail on to the local government. As a result, the agency does not receive sales tax data for individual stores when the retailer has more than one stor within the agency's boundaries. CONTINUED ON ATTACHMENT: _ YES SIGNATURE: �p Ll RECOMMENDATION OF COU v rY ADMINISTRATOR RECOMMENDATION OF BOARD COM I E ✓ APPROVE OTHER r SIGNATURE (S): ACTION OF BOA D O /'�.�{ J (Oce APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN AND ENTERED ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. UNANIMOUS(ABSENT ) AYES: NOES: ABSENT: ABSTAIN: Contact: Cc: L.Delaney 5-1097 cz ATTESTED td "L S. Hoffman,CAO's Office JOHN CULLEN,CLERK OF THE BOARD OFSUPERVISORS L. Driscoll,CAD's Office C. Christian,via CAO's Office \ HdL Companies,via CAO's Offic BY: DEPUTY r ;r r M Site Specific Sales Tax Info., p.2 October 24, 2006 This lack of detail creates a variety of problems: • Many agencies have performance-based development agreements in which financial inducements for new projects are measured against sales tax generation. When sales tax amounts from multiple outlets are consolidated, the local agency cannot determine how much assistance is due under the terms of its agreement. • Proposed incorporations and annexations require considerable financial analysis and negotiations between counties and cities. The lack of individual store detail can skew the portions of the analysis dealing with sales and use tax. In addition, the County has several annexation agreements that require a split of taxes with cities, such as Concord and Martinez. (Specifically, the North Concord Annexation and the Morello-Midhill annexation.) Better data will assist the County in monitoring the implementation of the agreements to ensure each jurisdiction is receiving its proper share of revenue. • Local governments continue to be an important backup in the State Board of Equalization's efforts to ensure that revenues are being allocated correctly. Problems such as retailers selling off sub-outlets without filing a required form are often hidden because the local agency does not have the sub-outlet detail to compare. • Local agencies often use their sales tax data to check the accuracy of business license applications. The usefulness of the sales tax data is reduced when sales tax receipts from multiple locations are combined. Because the BOE currently requires taxpayers to submit allocation data by individual sub-outlet, this data should be passed on to the local agencies to cure the problems discussed above. It is helpful for as many local agencies as possible to make the request. Our sales consultants, The HdL Companies, are requesting that we send a letter to our Board Member confirming the need for the information and have also asked that MBIA MuniServices, another sales tax consultant, request the same of their clients.