2012 Q2 Sales Tax UpdateSALES TAX BY MAJOR BUSINESS GROUP
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
M
7 Eleven
888 Seafood
Allied Building
Products
Arco
Auto Zone
Bed Bath & Beyond
CH Auto
Charley Broms
Chevron
Circle K
OrS Pharmacy
Dunn Edwards
East GounTet
Seafood
Restaurant
In N Out Burgers
lVbcys
NkDonalds
Panda Egress
RjteAjd
Rosemead IVbIgiI
Rosemead Valley
Mart IVbIgiI
Sea Harbour
Seafood
Solar V\13rehouse
Southern Cal
Edison Cafe
Target
V\131m-art
Superceriter
General Restaurants Fuel and Autos Food Business Building
Consumer and Service and and and and
Goods Hotels Stations Transportation Drugs Industry Construction
DerrationsI second
were 7.5% higher
)d one year earl i er.
aitomobiles,
t rated easy
si incentives
growth and
:)tcl i norease
talcily heir industrial, business ser-
vices and equipment for energy r•
lated projects Restaurant and hotel
receipts grew by 8.6%, outpacing ell
other industry groups Except autos
aid transportation. Family apparel
sales were strong but weak electron -
ics/ appliances returns and lackluster
results from department stores and
big box discounters held general oon-
sumer group gains to a modest 3.9%.
Flattening fuel prices aid ongoing
weakness in lumber aid building ma-
terials sales also restrained overal I re-
sults
Outlook for the Year
The momentum for the recovery is
slowing aid has recently prompted
another round of "quantitative eas-
ing' by the Federal Reserve Board in
an effort to rei nvi gorate the housing
market and spur business investment
by keeping interest rates low. Retail
growth in California which fell fur-
ther than the nation as awhole duri ng
the" Greet Recession," may outpace
the nati on goi ngf orward but stubborn
unemployment, nearly static income
I evd,5 aid cauti ous busi ness spendi ng
wi I I keep overd I sales at moderate I ev-
els at least through 201415.
Sales Tax from On-line Retailers
AB 155, which was passed last year
as a compromise with Amazon.00m
went into effect on September 15.
While the bill expanded the states
abilityto require the collection of taK
on out-of-state saleIsI local agencies
expecting immediate revenue gains
will be di sappoi nted.
Federal case I acv oonti nues to provi de
that remote sel I ers W thout nexus in a
state are not required to collect that
states sales teDc Amazon agreed not
to contest AB 155's definition of nex-
uswhich includes remote sellers who
hateannud salesin Celiforniaof one
million dollarsor moreand who have
an in-state affiliate that provides ser-
vices in connection with the remote
seller's sales if those connected sales
Exceed $10,000 per year.
The Board of Equalization'sinitid es-
timate wets that the legislative change
would raise approximately $38.2 mil-
lion in one•oent local revenues How-
Ever since then, Amazon which was
a significant, portion of the estimate
has decided to build distribution fa-
cilities in California which will divert
the revenues to the hosting jurisdic
tions Other remote seller,5 such as
Overstock.00m, have announced that
they wi I I si mply drop thei r i n-state af-
filiates to avoid collecting the tax.
The Board of EqualizationExpectsto
add up to 100 staff pod ti ons over the
next three years to enforce the new
provisions However, at least initially,
local governments should not expect
annual revenues of more than $0.25
per capita aid the ultimate solution
continues to be f ederd 10 sl ati on that
eliminates the nexus prohibition and
levels the playing field for all retailers.
$4,000
$3,000
$2,000
$1,000
$0
Q2 Q2 Q2 Q2
09 10 11 12
moommom MEMEMMUMMEMEMENEM
Rosemead County California
19,544
-03%
39%
51%
15.136
201%
6,3%
8,0%
15,462
26,6%
7,6%
12,0%
— CONFIDENTIAL —
13%
11
— CONFIDENTIAL —
26
37
17,:392
3./A
38%
3,6%
15.822
17,5%
14,9%
-3,0%
15,368
15,9
7,4
6,8
13,977
-18%
84%
7,0
35.438
1,0%
13%
_01%
26,668
1,2%
11,9%
113%
100,115
-14,8
7,1
81
134.487
4,6
10
23
16,939
-138%
29%
25%
24,812
-24,4%
5,6%
13,6%