2008 Q4 Sales Tax UpdateCity of Rosemead
Sales Tax Update
FirslQNarler Receipts for Fourth Quarter Scrler (Oc1-Dec " 8.) -00
SALES TAX BY MAJOR BUSINESS GROUP
5600.000
■ Ph Quarter 1007
■ Quarter 2008
A.
Fuel and
Food
Business
Building
anu
Service
and
and
and
Transportation
Stations
Drugs
Industry
Construction
388 Seafood
Nlco Materials
4uto Used Car
auto Zone
3arr Lumber
3ed Bath & Beyond
:,H Auto
;,hariey Browns
:,hevron
,irde K
;VS Pharmacy
)el Mar Arco
)unn Edwards
Eastern Auto Sales
Jack in the Box
Macys
McDonalds
McDonalds
Office Depot
Rite Aid
Rosemead Valley
Mart
Sea Harbour
Seafood
Target
Wal Mart
Supercenter
REVENUE COMPARISON
Three Quarters - Fiscal Year To Date
2007-08 2008-09
Point-of-Sale
$2,513,921
$3,697,915
County Pool
280,462
401,698
State Pool
1,140
1,000
Gross Receipts
$2,795,523
$4,100,613
Less Triple Flip'
$(698,881)
$(1,025,153)
'Rennhursecl from county compensation fmd
Published by The HdL Companies in Spring 2009
www.hdicompanies.com 1 888.861.0220
Statewide Sales Sink!
Adjusted for accounting aberrations,
point of sale receipts from October
through December sales were 13.1°o
lower than the same quarter of 2007.
The revenues generated in this holiday
quarter were the lowest since 2003.
The declines occurred in all categories
of sales except fast food restaurants
and grocery stores and were experi-
enced in all counties and regions. Of
particular significance were the 23%
decline in receipts from petroleum re-
lated businesses which resulted from
declining prices and consumption, a
37% drop in revenues from new car
sales, and a 14.6% decrease in sales
tax allocations from building and con-
struction materials.
Tax revenues from general consumer
goods were down 10.4% from the
2007 holiday quarter while business to
business sales were 9.0% lower.
This was the sixth consecutive quar-
ter of lower statewide allocations.
Trade association surveys indicate that
January through March sales will be
equally dismal. The latest 1-1dL con-
sensus forecast estimates that fiscal
2008/2009 sales and use tax revenues
will be 8.8% below the prior year.
Most economists believe that the re-
cession will not bottom out until late
2009 and significant recovery will not
occur before 2011/2012.
New Sales Tax Rate
Article 13A of the state constitution
authorizes the state legislature to in-
crease taxes other than property- by
a two thirds vote. This allowed the
2008/2009 state budget compromise
which temporarily increases the state
portion of the sales and use tax rate
by l.0°-o from April 1, 2009 to July 1,
2011. The increase will be extended
for one additional year if voters ap-
prove Proposition 1A, the state spend-
ing cap measure on the May ballot.
This brings California's top combined
sales, transactions and use tax rate to
1025%, except in Los 1lngeles Coun-
ty, where on Jule 1, 2009 the maximum
possible rate becomes 10.75% as an
additional one-half cent tax passed by
that county's voters in November takes
effect. Only two agencies in California
will reach the highest rate.
Economists disagree on how consum-
ers will react to a double digit sales tax.
The actual impact may be difficult to
distinguish from sales lost due to cur-
rent economic conditions and record
low consumer confidence.
In preparing their revenue projections,
the State Department of Finance as-
sumed that the additional one cent tax
would result in a one percent loss in
future purchases.
Stimulus Package Benefits
The American Recovery- and Reinvest-
ment Act of 2009 will send an estimat-
ed $31 billion to the state. Roughly one
third will be used to backfill state bud-
get cutbacks in education and other
programs, another third for new state
spending and the final third for grants
made on a competitive basis. Near-
term benefits most likely to boost retail
spending include "Making Work Pay"
tax credits to boost payroll checks, ex-
tending and increasing unemployment
insurance payouts, and allowing buyers
of new vehicles purchased between
February 17th and December 31st to
deduct state sales tax from their fed-
eral income tax. Analysts warn that
for the short term, these benefits will
do little more than slow the economy's
descent.
$4,000
$3,000
$2,000
$1,000
$0
Q4 04 04 Q4
05 06 07 08
Rosemead County California
Rosemead
County
HdL State
Business Type
04'08
Change
Change
Change
Discount Dept Stores
- CONFI
DENTIAL -
1.4%
-3.3%
Department Stores
- CONFI
DENTIAL -
-9.9%
-7.6%
Restaurants No Alcohol
102,103
6.3%
1.8%
1.3%
Service Stations
69,158
-9.8%
-20.3%
-23.1%
Used Automotive Dealers
40,503
-21.2%
-31.2%
-27.5°%
Restaurants Liquor
27,968
-3.1°%
-2.3%
-1.0%
Restaurants Beer And Wine
25,211
15.8%
-5.8%
-6.7%
Auto Repair Shops
21,273
-6.9%
-7.0%
-6.9%
Specialty Stores
21,173
-0.6%
-8.7%
-7.2%
ElectronicstAppliance Stores
20,294
-5.3%
-10.5%
-13.0%
Drug Stores
18,908
-1.3%
-0.8%
-1.4%
Home Furnishings
16,283
-1.9%
-19.0%
-20.1%
Grocery Stores Liquor
13,348
22.9%
-0.1%
0.7%
Contractors
12,047
-26.3%
-20.2%
-15.6%
Grocery Stores BeerMine
11.804
19.9%
-6.1%
-7.9%
Total All Accounts
$970,369
14.2%
-10.3%
-10.3%
County 8 State Pool Allocation
106,142
5.7%
Gross Receipts
$1,076,511
13.3%