HomeMy WebLinkAboutQ4 Sales Tax 2017City of Azusa
Sales Tax Update
FirstQuarter Receipts for Fourth Quarter Sales (October - December 2017)
SALES TAX BY MAJOR BUSINESS GROUP
$700,000
Innovative Designs
& Manufacturing
Kali Matha Mobil
McDonalds
Outlet By ELS
Rain Bird
Corporation
Ross
Shell
Stater Bros
Target
Totten Tubes
USA Gas
Valley Thrift Store
Virginia Hardwood
4th Quarter 2016
■ 4th Quarter2017
■ M ft
Business Fuel and Food Autos Building
and Service and and and
Industry Stations Drugs Transportation Construction
REVENUE COMPARISON
Three Quarters — Fiscal Year To Date
2016-17
2017-18
Point -of -Sale
$3,687,736
$3,827,500
County Pool
527,305
536,993
State Pool
2,187
744
Gross Receipts
$4,217,229
$4,365,237
Published by HdL Companies in Spring 2018 HdEew`
www.hdicompanies.com 1888.861.0220 C O M P A N IE 5
California Overall
Factored for accounting anomalies,
statewide fourth quarter receipts from
local government's one cent sales tax
were 4.4% higher than the holiday
quarter of 2016.
Rising fuel prices and solid gains from
building/construction supplies, restau-
rants and e-commerce were the primary
contributors to the overall increase. A
ltealLliy quay Let fot auto sales and con-
stntrtinn equipment were additinnol
factors. Tax revenues from general
consumer goods sold through brick and
mortar stores rose a modest 1% over last
year's comparable quarter while receipts
from online sales increased 13.2%.
Performance for the inland areas of the
state were generally stronger than the
coastal areas i i i ,. ,
ad
from the previous downturn.
IN cXUJ 11NJUc W be Rvc viaiicu
In 1992, the U.S. Supreme Court
.ruled in Quill v. North Dakota that
businesses lacking a physical presence
or "nexus" in a state cannot be required
to collect or remit that state's taxes.
This does not excuse buyers from
paying a corresponding use tax but the
costs of enforcement, particularly on
smaller purchases, is difficult and local
brick and mortar retailers are placed at
a competitive disadvantage.
California has been more effective at
collecting use Lax than most states
with an aggressive program of audit-
ing major business purchases, requir-
ing CPAs to report unpaid use tax on
client's annual returns and requiring
of $100,000 or more to register for the
purposes of reporting use tax.
The State has also increased the
number of out-of-state sellers required
to collect sales tax through broader
definitions of what constitutes physical
presence including a requirement that
larger internet retailers collect and
remit sales tax if paying a commission
for customer referrals obtained via a
link on a California seller's website.
Still, the estimated revenue losses are
substantial particularly for agencies
with voter -approved transactions tax
districts. Because of Quill, retailers are
not required to collect the tax for
purchases in an adjacent jurisdiction
if the retailer has no physical presence
in that jurisdiction. The resulting loss
to local governments projected by the
State Board of Equalization in 2016-17
was $756 Million in uncollected tax
revenues and losses to the state of $697
Million:(https://www.boe.ca.gov/
legdi v/pdf/e-c:on a nerce-2017 F. pd O.
Congress has refused to act on nu
merous attempts to seek legislative relief
over the last two decades. However,
three justices - Clarence Thomas, Neil
Gorsuch and Anthony Kennedy have
recently expressed doubts about the
Quill, decision with Kennedy noting in
2015, that the Luling has produced a
n , r n
"startling revenue shortfall"
in many
states aE mall - "nnfo;rna s to Incal
retailers and customers."
In January 2018, the i_I,S, Supreme
Court agreed to hear arguments in
the case of South Dakota v. Way -fair
Inc. where Wayfair is challenging the
State's recently adopted requirement
that retailers collect and remit, or pay,
sales tax on purchases made by South
Dakota residents.
Oral arguments are scheduled for April
with a decision expected by the end of
June 2018.
$4,000
$3,000
$2,000
$1,000
$0
Q4 Q4 Q4 Q4
14 15 16 17
A711sa County California
Conc.Goode
41%
Fo
Restaurants
1$'75
Pools
13%
BUS./Ind.
11%
Others Fug{
7% 10%
AzUSA Top 15 BUSINESS TYPES
"In thousands of dollars Azusa County HdL State
Business Type
Auto Repair Shops
Automotive Supply Stores
Casual Dining
Q4'17"
18.5
26.2
53.0
Change
-8.0%
2.7%
4.5%
Change
-0.5%
0.2%
3.8%
onFIRE '
2°')
o
Convenience Stores/Liquor
25.0
-8.6%
8.2%
Discount Dept Stores
-CONFIDENTIAL-
3.7%
Drug Stores
-CONFIDENTIAL-
-11.7%
Family Apparel
-CONFIDENTIAL-
3.1%
Garden/Agricultural Supplies
23.3
-29.1%
2.1%
Grocery Stores
23.5
20.5%
-5.9%
Heavy Industrial
60.9
28.0%
5.8%
Light Industrial/Printers
30.5
10.2%
-3.9%
Plumbing/Electrical Supplies
29.5
4.9%
7.5%
Quick -Service Restaurants
121.2
14.4%
4.4%
Service Stations
155.8
7.1 %
10.0%
Total All Accounts
1,315.2
-1.6%
-0.9%
County & State Pool Allocation
192.7
-1.2%
-0.5%
Gross Receipts
1,507.9
-1.5%
-0.8%
Change
3.6%
1.9%
3.8%
i3"8%-
8.2%
4.1 %
-10.9%
2.1 %
2.3%
-1.5%
10.0%
0.8%
10.3%
4.9%
11.4%
4.0%
0.8%
3.6%