HomeMy WebLinkAboutStaff Report 12401
City of Palo Alto (ID # 12401)
City Council Staff Report
Report Type: Informational Report Meeting Date: 9/20/2021
City of Palo Alto Page 1
Title: Sales Tax Digest Summary Calendar 2021 Q1
From: City Manager
Lead Department: Administrative Services
Information
This report transmits information regarding the City of Palo Alto’s sales tax receipts for
the first quarter (January to March) of 2021.
There are two attachments to this report that provide further level of information:
• City of Palo Alto Sales Tax Digest Summary (Attachment A)
• California Legislative Update -June 2021 (Attachment B)
The City’s sales tax cash receipts of $6.8 million for the first quarter (January to March
2021) is $1.1 million (19.8 percent) higher than the same quarter of the prior year (see
Attachment A, chart 5). This increase includes late payment anomalies related to the
state sales tax extension program to help alleviate the short term and negative
economic impacts of the pandemic. After adjustments made for the non-period related
payments, the overall economic quarter over quarter sales tax activity
decreased by 9.8 percent. It should be noted that only one month (March) of Q1
2020 saw significant impacts from COVID-19; although the recovery was underway in
Q1 of 2021 the local economy has still not reached pre-pandemic levels.
For the year ending in the first quarter of 2021, cash receipts (including pools) for the
City declined 19.3 percent from the prior year. In comparison, statewide increased by
3.4 percent, Northern California increased by 4.9 percent, and Southern California by
2.4 percent.
After adjustments for non-period related payments, the overall economic sales tax
activity (local business excluding pools) in Palo Alto for the year decreased
by 25.9 percent. After adjustments, the economic sales tax activity for the state
decreased 17.4 percent, 12.4 percent in Northern California and 20.6 percent in
Southern California.
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While reviewing the first quarter figures, it is important to recognize that the state of
California offered small businesses a 90-day extension to pay their first quarter of 2020
taxes due to the economic impact of the pandemic. This resulted in some businesses
having partial or no payments for the first quarter of 2020.
Attachments:
• Attachment10.a: Attachment A - 2021 Q1 Sales Tax Digest Summary
• Attachment10.b: Attachment B - California Legislative Update, June 2021 Highlights
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Sales Tax Digest Summary
Collections through May 2021
Sales January through March 2021 (2021Q1)
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California Overview
For the year ending in first quarter 2021, cash receipts (including pools) increased 3.4% statewide, 4.9%
in Northern California and 2.4% in Southern California. However, when adjusted for non-period related
payments, the overall economic sales tax activity (excluding pools) for the year ending in first quarter 2021
decreased by -17.4% statewide, down 20.6% in Southern California and down 12.4% in Northern
California.
City of Palo Alto
For the year ending in the first quarter of 2021, sales tax cash receipts (including pools) for the city
declined -19.3% from the prior year. However, when adjusted for non-period related payments, the
overall economic sales tax activity (local businesses excluding pools) in Palo Alto for the year ending in
first quarter 2021 decreased by -25.9%.
On a quarterly basis, sales tax cash receipts (including pools) increased by 19.8% from Quarter 1 2020 to
Quarter 1 2021. However, this increase includes late payment anomalies related to a state sales tax
extension program (see note below). The period’s cash receipts include tax from business activity during
the period, payments for prior periods and other cash adjustments. When adjusted for non-period related
payments, the overall economic quarter over quarter sales tax activity (local businesses excluding pools -
Q1 2020 to Q1 2021) in Palo Alto decreased by -9.8%.
Note: It is important to recognize that the state offered small businesses a 90-day extension to pay their
first quarter of 2020 taxes (to alleviate some of the short-term economic difficulties of the pandemic), and
some businesses had partial or no payments for the first quarter of 2020. As a result of this extension
program, some payments for first quarter economic activity were paid in the second quarter of 2020.
While Palo Alto experienced a 26.6% cash decrease for the first quarter of 2020 (from Q1 2019), this
includes late payment decreases related to the state 90-day extension program and actual first quarter of
2020 economic activity did not decline to this extent.
Regional Overview
The first chart on page two shows adjusted economic benchmark year amounts, which means that it
shows a full calendar year from the second quarter of 2020 through first quarter of 2021 compared to
second quarter of 2019 through first quarter of 2020 (benchmark years are rolling annual comparisons
through the current quarter). The decrease is different between the state and Palo Alto because the sales
tax from businesses in Palo Alto were more impacted than those statewide.
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$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
Quarterly Benchmark Year
% of Total / % Change Palo Alto California
Statewide S.F. Bay Area Sacramento
Valley Central Valley South Coast Inland Empire North Coast Central Coast
General Retail 24.4 / -41.2 27.6 / -14.7 26.1 / -15.7 26.2 / 0.7 36.6 / 18.3 26.4 / -17 28.5 / -36.5 29.5 / 4.2 25.9 / -23.8
Food Products 11.5 / -49.9 18.1 / -29.9 17.2 / -37.1 15.3 / -14.5 13.8 / -17.4 20.0 / -26.8 17.3 / -42.1 17.6 / -34.9 28.0 / -32.5
Transportation 22.3 / -20.6 23.6 / -16.5 21.0 / -18.3 28.1 / -1.8 21.5 / -17.8 24.1 / -10.9 25.4 / -39.8 27.2 / -0.4 24.8 / -8.1
Business to Business 38.1 / -6.5 17.9 / -15.6 22.7 / -6.2 15.2 / -5.1 15.6 / -13.0 17.7 / -13.4 13.3 / -50.6 9.1 / -4.9 9.4 / -25.3
Misc/Other 4.1 / 78.4 12.8 / -4.9 13.1 / -7.1 15.3 / 6.2 12.5 / 0.3 11.8 / 2.9 15.5 / -31.1 16.5 / 8.8 11.9 / 7.2
Total 100.0 / -25.9 100.0 / -17.4 100.0 / -18.2 100.0 / -2.8 100.0 / -4.0 100.0 / -15.3 100.0 / -39.9 100.0 / -7.0 100.0 / -20.7
Palo Alto California
Statewide S.F. Bay Area Sacramento
Valley Central Valley South Coast Inland Empire North Coast Central Coast
Largest Segment Leasing Auto Sales -
New
Auto Sales -
New
Auto Sales -
New
Department
Stores
Auto Sales -
New
Auto Sales -
New
Department
Stores Restaurants
% of Total / % Change 19.7 / 24.1 12.1 / -2.8 11.9 / -6.5 12.9 / 11.2 12.0 / -4.4 12.9 / 4.2 11.8 / -25.8 12.0 / 5.7 17.2 / -42.1
2nd Largest Segment Auto Sales -
New Restaurants Restaurants Department
Stores
Furniture/
Appliance Restaurants Department
Stores
Auto Sales -
New
Auto Sales -
New
% of Total / % Change 19.1 / -18.0 11.3 / -38.3 10.3 / -47.3 10.3 / -3.3 10.1 / 64.1 12.9 / -35.6 11.0 / -36.6 11.9 / 15.7 15.1 / 11.4
3rd Largest Segment Office
Equipment
Department
Stores
Miscellaneous
Retail Restaurants Miscellaneous
Retail
Department
Stores Restaurants Restaurants Food Markets
% of Total / % Change 10.7 / -30.7 9.0 / -15.5 10.0 / 7.9 9.3 / -22.2 8.7 / 52.2 8.8 / -12.0 10.0 / -46.7 11.2 / -46.7 8.6 / -10.8
ECONOMIC CATEGORY ANALYSIS FOR YEAR ENDED 1st Quarter 2021
ECONOMIC SEGMENT ANALYSIS FOR YEAR ENDED 1st Quarter 2021
Regional Overview Chart (Economic)
Gross Historical Sales Tax Cash Receipts by Benchmark Year and Quarter (Before Adjustments)
Chart 1
Chart 2
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Auto Sales -New
19.1%
Restaurants
9.6%
Leasing
19.7%
Office Equipment
10.7%Furniture/Appliance
3.7%
Department Stores
3.8%
All Other
33.4%
Net Pools & Adjustments
22.0%
Anderson Honda Louis Vuitton Shreve & Co.
Apple Stores Lucile Packard Children's Hospital Space Systems Loral
Atila Biosystems Macy's Department Store Stanford Outpatient Clinic Pharmacy
Audi Palo Alto Magnussen's Toyota of Palo Alto Tesla
Dell Marketing Neiman Marcus Department Store Tesla Lease Trust
Enclos Corporation Nordstrom Department Store Tiffany & Company
Hengehold Trucks Richemont Varian Medical Systems
Hermes Shell Service Stations Volvo Cars Palo Alto
HP Computing & Printing
Net Cash Receipts for Benchmark Year First Quarter 2021: $26,480,678
*Benchmark year (BMY) is the sum of the current and 3 previous quarters (2021Q1 BMY is sum of 2021 Q1, 2020 Q4, 2020 Q3, 2020 Q2)
TOP 25 SALES/USE TAX CONTRIBUTORS
The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order
and represents the year ended first quarter of 2021. The Top 25 Sales/Use Tax contributors generate
63.7% of Palo Alto’s total sales and use tax revenue.
Chart 3
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$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
Benchmark Year 2021Q1 Benchmark Year 2020Q1
Sales Tax from Largest Non-Confidential Sales Tax Segments (Economic)
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Economic Category % 2021Q1 2020Q4 2020Q3 2020Q2 2020Q1 2019Q4 2019Q3 2019Q2 2019Q1 2018Q4 2018Q3
Business To Business 35.3% 1,803,993 1,948,294 2,027,964 1,870,893 2,010,844 2,381,737 1,950,735 1,958,684 2,244,140 1,910,168 1,390,421
Miscellaneous/Other 27.9% 1,424,075 1,650,242 1,321,778 990,334 1,225,410 1,692,985 1,516,049 1,784,443 1,464,631 2,497,498 2,248,618
General Retail 24.7% 1,259,993 1,709,004 1,298,977 657,723 1,449,509 2,573,066 2,415,683 1,993,189 1,887,330 2,559,140 2,103,433
Food Products 12.2% 621,710 721,698 647,289 434,446 976,479 1,244,954 1,203,802 1,267,934 1,176,607 1,240,898 1,200,777
Subtotal Economic (Local Business) 75.3% 5,109,771 6,029,238 5,296,007 3,953,397 5,662,242 7,892,743 7,086,269 7,004,251 6,772,708 8,207,703 6,943,250
Net Pools & Adjustments 24.7% 1,680,031 1,311,945 1,227,317 1,872,972 4,307 1,949,165 1,471,130 1,742,411 942,447 1,700,082 2,776,978
Total Cash Receipts 100.0% 6,789,802 7,341,183 6,523,324 5,826,368 5,666,550 9,841,908 8,557,399 8,746,661 7,715,155 9,907,785 9,720,228
Economic Segment % 2021Q1 2020Q4 2020Q3 2020Q2 2020Q1 2019Q4 2019Q3 2019Q2 2019Q1 2018Q4 2018Q3
Miscellaneous/Other 68.3% 3,491,725 4,014,369 3,687,523 3,192,638 3,556,542 4,675,922 4,323,203 4,044,470 4,097,682 4,842,499 4,049,966
Restaurants 10.4% 529,770 600,427 543,111 339,414 853,240 1,095,153 1,072,082 1,122,871 1,041,119 1,079,230 1,061,607
Miscellaneous Retail 6.4% 329,448 456,914 325,380 107,313 279,945 500,221 384,381 392,196 333,960 544,739 368,526
Apparel Stores 5.2% 263,259 365,837 263,940 72,307 305,736 552,734 469,447 486,790 408,476 599,685 509,814
Department Stores 4.6% 237,522 315,453 186,208 29,823 245,862 552,822 431,508 453,439 356,943 599,796 475,142
Service Stations 2.3% 117,648 127,467 108,840 70,063 146,282 181,063 175,309 185,969 159,032 173,915 179,644
Food Markets 1.4% 71,860 91,881 81,580 76,039 102,026 118,952 104,192 113,153 106,194 124,138 109,282
Business Services 1.3% 68,539 56,890 99,426 65,799 172,609 215,876 126,148 205,363 269,302 243,701 189,269
Subtotal Economic (Local Business) 75.3% 5,109,771 6,029,238 5,296,007 3,953,397 5,662,242 7,892,743 7,086,269 7,004,251 6,772,708 8,207,703 6,943,250
Net Pools & Adjustments 24.7% 1,680,031 1,311,945 1,227,317 1,872,972 4,307 1,949,165 1,471,130 1,742,411 942,447 1,700,082 2,776,978
Total Cash Receipts 100.0% 6,789,802 7,341,183 6,523,324 5,826,368 5,666,550 9,841,908 8,557,399 8,746,661 7,715,155 9,907,785 9,720,228
Historical Analysis by Calendar Quarter
The chart above shows the categories and segments in quarterly economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding
up the categories/segments with the “Net Pools & Adjustments” amount.
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Campbell 1.9% -25.0% -12.0% 14.7% 16.1%2,010,859 2,097,031 -4.1% Office Equipment Bldg.Matls-Retail Restaurants Electronic Equipment
Cupertino 0.3% -24.2% -38.6% 76.5% -49.0%9,632,090 6,067,201 58.8% Office Equipment Electronic Equipment Restaurants I.T. Infrastructure
Gilroy 15.7% -3.7% 1.0% 11.8% 7.0%3,153,084 2,938,276 7.3% Apparel Stores Department Stores Service Stations Auto Sales - New
Los Altos -5.6% -24.3% -16.0% 33.2% -0.5%420,974 498,817 -15.6% Green Energy Furniture/Appliance Restaurants Food Markets
Los Gatos -20.1% -23.6% 7.3% -14.9% 0.5%1,159,079 1,313,713 -11.8% Auto Sales - New Auto Parts/Repair Restaurants Furniture/Appliance
Milpitas -12.7% -19.6% 8.9% -7.8% 2.6%4,333,468 4,659,827 -7.0% Auto Sales - New Business Services Electronic Equipment Restaurants
Morgan Hill 2.9% -6.0% 30.4% -25.3% -13.7%2,020,048 1,981,971 1.9% Auto Sales - New Misc. Vehicle Sales Light Industry Bldg.Matls-Whsle
Mountain View -5.0% -15.3% 7.4% -6.7% -34.3%3,313,372 3,646,821 -9.1% Auto Sales - New Office Equipment Restaurants Business Services
Palo Alto -13.1% -36.3% 9.2% -10.3% 85.0%5,109,771 5,662,242 -9.8% Leasing Auto Sales - New Restaurants Office Equipment
San Jose -0.7% -17.4% 8.0% -4.2% 4.2%33,730,060 34,459,494 -2.1% Auto Sales - New Office Equipment Restaurants I.T. Infrastructure
Santa Clara -6.4% -30.5% 14.0% -21.5% -13.9%8,988,790 10,544,511 -14.8% Auto Sales - New Light Industry Office Equipment Restaurants
County of Santa Clara -23.9% -14.3% 0.7% -27.8% 8.1%830,226 939,923 -11.7% Food Processing Eqp Heavy Industry Restaurants Business Services
Saratoga -26.7% -22.6% -4.1% 51.2% -16.5%164,570 199,888 -17.7% Business Services Auto Parts/Repair Restaurants Miscellaneous Retail
Sunnyvale -18.7% -26.2% 7.4% -3.7% 1.8%4,754,063 5,168,450 -8.0% Auto Sales - New Office Equipment Restaurants Department Stores
Quarterly Analysis by Sales Tax Category: Change from 2020Q1 to 2021Q1 (Economic)
Unlike the chart on page one which showed a ‘benchmark year’ through first quarter of 2021, the chart above shows a comparison of one quarter only – first quarter
of 2021 to first quarter of 2020. This chart is for local ‘brick and mortar’ businesses and it excludes county pools and adjustments.
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California Avenue % CHANGE QoQ 2021Q1 QE 2020Q1 QE 21Q1 % OF TOTAL 20Q1 % OF TOTAL
FOOD PRODUCTS -39.7% 28,704 47,627 34.5%50.2%
GENERAL RETAIL 119.4% 27,078 12,339 32.5%13.0%
ALL OTHER -21.3% 27,524 34,958 33.0%36.8%
TOTAL -12.2% 83,307 94,924 100.0% 100.0%
El Camino Real and Midtown % CHANGE QoQ 2021Q1 QE 2020Q1 QE 21Q1 % OF TOTAL 20Q1 % OF TOTAL
FOOD PRODUCTS -34.0% 89,488 135,651 22.4%45.8%
GENERAL RETAIL -25.8% 28,652 38,591 7.2%13.0%
ALL OTHER 131.0% 281,289 121,769 70.4%41.1%
TOTAL 34.9% 399,430 296,012 100.0% 100.0%
Greater Downtown % CHANGE QoQ 2021Q1 QE 2020Q1 QE 21Q1 % OF TOTAL 20Q1 % OF TOTAL
FOOD PRODUCTS -42.7% 200,563 349,957 51.8%55.0%
GENERAL RETAIL -43.1% 124,193 218,379 32.1%34.3%
BUSINESS TO BUSINESS -15.2% 40,789 48,124 10.5%7.6%
CONSTRUCTION 11.6% 10,985 9,847 2.8%1.5%
MISCELLANEOUS 9.3% 7,637 6,989 2.0%1.1%
TRANSPORTATION 0.7% 3,063 3,041 0.8%0.5%
TOTAL -39.1% 387,230 636,337 100.0% 100.0%
Stanford Shopping Center % CHANGE QoQ 2021Q1 QE 2020Q1 QE 21Q1 % OF TOTAL 20Q1 % OF TOTAL
GENERAL RETAIL -4.9% 698,563 734,479 71.4%54.7%
FOOD PRODUCTS -25.0% 97,566 130,160 10.0%9.7%
ALL OTHER -61.9% 182,149 477,455 18.6%35.6%
TOTAL -27.1% 978,278 1,342,094 100.0% 100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2020Q1 to 2021Q1 (Economic)
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Town And Country Shopping Center % CHANGE QoQ 2021Q1 QE 2020Q1 QE 21Q1 % OF TOTAL 20Q1 % OF TOTAL
GENERAL RETAIL -17.4%43,098 52,208 41.2%43.2%
ALL OTHER -10.4%61,424 68,539 58.8%56.8%
TOTAL -13.4%104,523 120,747 100.0%100.0%
All Other Geos combined with Balance of Jurisdiction % CHANGE QoQ 2021Q1 QE 2020Q1 QE 21Q1 % OF TOTAL 20Q1 % OF TOTAL
BUSINESS TO BUSINESS -9.1%1,639,485 1,804,391 35.9%35.3%
TRANSPORTATION 9.5%1,213,519 1,108,590 26.6%21.7%
GENERAL RETAIL -14.3%1,113,896 1,299,375 24.4%25.4%
FOOD PRODUCTS -37.5%509,505 815,674 11.2%16.0%
MISCELLANEOUS 19.6%62,436 52,210 1.4%1.0%
CONSTRUCTION -14.0%24,394 28,372 0.5%0.6%
TOTAL -10.7%4,563,235 5,108,611 100.0%100.0%
All Geo Area Totals Comparison 21Q1 & 20Q1 % CHANGE QoQ 2021Q1 QE 2020Q1 QE 21Q1 % OF TOTAL 20Q1 % OF TOTAL
Balance of Jurisdiction -0.3%2,610,469 2,618,497 57.2%51.3%
Stanford Shopping Center -27.1%978,278 1,342,094 21.4%26.3%
El Camino Real and Midtown 34.9%399,430 296,012 8.8%5.8%
Greater Downtown -39.1%387,230 636,337 8.5%12.5%
Town And Country Shopping Center -13.4%104,523 120,747 2.3%2.4%
California Avenue -12.2%83,307 94,924 1.8%1.9%
TOTAL -10.7%4,563,235 5,108,611 100.0%100.0%
Palo Alto citywide QE 21Q1 & 20Q1 % CHANGE QoQ 2021Q1 QE 2020Q1 QE 21Q1 % OF TOTAL 20Q1 % OF TOTAL
BUSINESS TO BUSINESS -10.3%1,803,993 2,010,844 35.3%35.5%
GENERAL RETAIL -13.1%1,259,993 1,449,509 24.7%25.6%
TRANSPORTATION 9.2%1,214,218 1,111,985 23.8%19.6%
FOOD PRODUCTS -36.3%621,710 976,479 12.2%17.2%
MISCELLANEOUS 138.5%181,778 76,211 3.6%1.3%
CONSTRUCTION -24.5%28,079 37,214 0.5%0.7%
TOTAL -9.8%5,109,771 5,662,242 100.0%100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2020Q1 to 2021Q1 (Economic) Cont.
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FOOD PRODUCTS,
-39.7% CHANGE, $28,704 ,
34.5% TOTAL
GENERAL RETAIL, 119.4% CHANGE,
$27,078 , 32.5% TOTAL
ALL OTHER,
-21.3% CHANGE, $27,524 ,
33.0% TOTAL
California Avenue 2021Q1 SALES TAX AMOUNTS
FOOD PRODUCTS, $47,627 ,
50.2%TOTAL
GENERAL RETAIL,
$12,339 , 13.0%TOTAL
ALL OTHER, $34,958 ,
36.8%TOTAL
California Avenue 2020Q1 SALES TAX AMOUNTS
FOOD PRODUCTS,
-34.0%CHANGE, $89,488 ,
22.4%TOTAL
GENERAL RETAIL,
-25.8% CHANGE, $28,652 ,
7.2%TOTAL
ALL OTHER,
131.0% CHANGE,
$281,289 ,
70.4%TOTAL
El Camino Real and Midtown 2021Q1SALES TAX AMOUNTS
FOOD PRODUCTS,
$135,651 ,
45.8%TOTAL
GENERAL RETAIL,
$38,591, 13.0%TOTAL
ALL OTHER,
$121,769,
41.1%TOTAL
El Camino Real and Midtown 2020Q1SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts
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FOOD PRODUCTS,
-42.7%CHANGE, $200,563 ,
51.8%TOTAL
GENERAL RETAIL,
-43.1% CHANGE,
$124,193 , 32.1%TOTAL
BUSINESS TO BUSINESS,
-15.2% CHANGE, $40,789 ,
10.5%TOTAL
CONSTRUCTION,
11.6% CHANGE, $10,985 ,
2.8%TOTAL
MISCELLANEOUS, 9.3% CHANGE,
$7,637 , 2.0%TOTAL
TRANSPORTATION, 0.7% CHANGE,
$3,063 , 0.8%TOTAL
Greater Downtown 2021Q1 SALES TAX AMOUNTS
FOOD PRODUCTS,
$349,957 , 55.0%TOTAL
GENERAL RETAIL,
$218,379 , 34.3%TOTAL
BUSINESS TO BUSINESS,
$48,124 , 7.6%TOTAL
CONSTRUCTION,
$9,847 , 1.5%TOTAL
MISCELLANEOUS,
$6,989 , 1.1%TOTAL
TRANSPORTATION, $3,041 ,
0.5%TOTAL
Greater Downtown 2020Q1SALES TAX AMOUNTS
GENERAL RETAIL
$734,479 , 54.7%TOTAL
FOOD PRODUCTS,
$130,160 , 9.7%TOTAL
ALL OTHER, $477,455 ,
35.6%TOTAL
Stanford Shopping Center 2020Q1 SALES TAX AMOUNTS
GENERAL RETAIL, -4.9% CHANGE,
$698,563 , 71.4%TOTAL
FOOD PRODUCTS,
-25.0% CHANGE,
$97,566 , 10.0%TOTAL
ALL OTHER, -61.9% CHANGE,
$182,149 , 18.6%TOTAL
Stanford Shopping Center 2021Q1 SALES TAX AMOUNTS
City of Palo Alto Geo Areas Pie Charts
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GENERAL RETAIL,
-17.4%CHANGE, $43,098 ,
41.2%TOTAL
ALL OTHER,
-10.4% CHANGE,
$61,424 , 58.8%TOTAL
Town And Country Shopping Center 2021Q1SALES TAX AMOUNTS
GENERAL RETAIL, $52,208 ,
43.2%TOTALALL OTHER, $68,539 ,
56.8%TOTAL
Town And Country Shopping Center2020Q1 SALES TAX AMOUNTS
BUSINESS TO BUSINESS,
-9.1%CHANGE,
$1,639,485 ,
35.9%TOTAL
TRANSPORTATION,
9.5% CHANGE, $1,213,519,
26.6% TOTAL
GENERAL RETAIL,
-14.3% CHANGE,
$1,113,896,
24.4% TOTAL
FOOD PRODUCTS,
-37.5% CHANGE,
$509,505 , 11.2%TOTAL
MISCELLANEOUS,
19.6% CHANGE, $62,436 ,
1.4%TOTAL
CONSTRUCTION, -14.0% CHANGE,
$24,394 , 0.5%TOTAL
All Other Geos combined with Balance of Jurisdiction 2021Q1 SALES
TAX AMOUNTS
BUSINESS TO BUSINESS,
$1,804,391 ,
35.3%TOTAL
TRANSPORTATION,
$1,108,590,
21.7% TOTAL
GENERAL RETAIL,
$1,299,375,
25.4% TOTAL
FOOD PRODUCTS,
$815,674 , 16.0%TOTAL
MISCELLANEOUS,
$52,210 , 1.0%TOTAL
CONSTRUCTION,
$28,372 , 0.6%TOTAL
All Other Geos combined with Balance of Jurisdiction 2020Q1SALES
TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts
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BUSINESS TO BUSINESS,
-10.3%CHANGE, $1,803,993 ,
35.3%TOTAL
GENERAL RETAIL,
-13.1% CHANGE,
$1,259,993 , 24.7%TOTAL
TRANSPORTATION,
9.2% CHANGE,
$1,214,218 ,
23.8%TOTAL
FOOD PRODUCTS,
-36.03% CHANGE,
$621,710 , 12.2%TOTAL
MISCELLANEOUS, 138.5% CHANGE,
$181,778 , 3.6%TOTAL
CONSTRUCTION,
-24.5% CHANGE,
$28,079 , 0.5%TOTAL
Palo Alto citywide 2021Q1 SALES TAX AMOUNTS
BUSINESS TO BUSINESS,
$2,010,844 , 35.5%TOTAL
GENERAL RETAIL,
$1,449,509 ,
25.6%TOTAL
TRANSPORTATION,
$1,111,985 ,
19.6%TOTAL
FOOD PRODUCTS,
$976,479 , 17.2%TOTAL
MISCELLANEOUS,
$76,211 , 1.3%TOTAL CONSTRUCTION,
$37,214 , 0.7%TOTAL
Palo Alto citywide 2020Q1 SALES TAX AMOUNTS
Balance of Jurisdiction,
-0.3%CHANGE,
$2,610,469 ,
57.2%TOTAL
Stanford Shopping Center,
-27.1% CHANGE, $978,278 ,
21.4%TOTAL
El Camino Real and Midtown,
34.9% CHANGE, $399,430 ,
8.8%TOTAL
Greater Downtown,
-39.1% CHANGE,
$387,230 , 8.5%TOTAL
Town And Country Shopping Center,
-13.4% CHANGE, $104,523 , 2.3%TOTAL California Avenue, -12.2% CHANGE,
$83,307 , 1.8%TOTAL
All Geo Area Totals 2021Q1 SALES TAX AMOUNTS
Balance of Jurisdiction,
$2,618,497 , 51.3%TOTAL
Stanford Shopping Center,
$1,342,094 , 26.3%TOTAL
El Camino Real and Midtown,
$296,012 , 5.8%TOTAL
Greater Downtown,
$636,337 ,12.5%TOTAL
Town And Country Shopping Center,
$120,747 , 2.4%TOTAL California Avenue,
$94,924 , 1.9%TOTAL
All Geo Area Totals 2020Q1 SALES TAX AMOUNTS
City of Palo Alto Geo Area & Citywide Pie Charts
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March 2021
In recent weeks, the State Legislature has been working actively on their state budget proposals and to meet
the statutory deadlines to move bills from their house of origin to the other house by the June 4th deadline.
On May 19th, the Speaker Pro Tempore Toni Atkins announced that each legislator would be limited to
sending 12 bills to the opposite house. Some bills may be excluded from this requirement if they are being
proposed to be implemented immediately. Below is a summary of key legislation moving through the
California State Legislature. We will continue to provide updates as new information emerges and
information become available, and as bills are amended to include issues of concern to local governments.
We hope this information is helpful. Please feel free to contact me with any questions.
Fran Mancia, Vice President of Government Relations Fran.Mancia@AvenuInsights.com
2021-22 Legislation of Interest
Sales and Use Tax: Exemptions and Exclusions
AB 217 (Valladares) Sales and Use Taxes. Exemption. Tax Holiday. School Supplies.
Provides a sales tax exemption for school supplies for a single back-to-school buying season for a three-
day period (July 30, 2022 to August 1, 2022).
Status: Referred to the Assembly Revenue and Taxation Committee
Cal Cities Position: Oppose
CSAC Position: Oppose, Unless Amended
AB 296 (Gipson) Sales and Use Taxes: Exclusion: Pawnbrokers: Transfer of Vested Property.
Extends an existing sales and use tax exclusion for transfer of vested property for another five years, until
January 1, 2027, when a customer buys back their property from a pawnbroker after defaulting on a loan.
Status: Referred to the Senate Governance and Finance Committee
Cal Cities Position: Watch
CSAC Position: Watch
Note: The Assembly Appropriations Committee estimates annual state and local revenue losses of
approximately $34,000.
AB 607 (Arambula) Sales and Use Taxes. Exemptions. Blood Screening.
Provides a five-year sales and use tax exemption for licensed blood bank equipment and supplies.
Status: Referred to the Assembly Revenue and Taxation Committee
Cal Cities Position: Oppose
CSAC Position: Oppose, Unless Amended
AB 879 (Rubio) Personal income tax: corporation tax: sales and use taxes: California Tax Amnesty
and Revenue Recovery Act.
Requires the Franchise Tax Board (FTB) and California Department of Tax and Fee Administration
(CDTFA) to administer a tax amnesty program for eligible taxpayers, waiving penalty and fee liabilities
for tax reporting periods between January 1, 2020, and January 1, 2021. A taxpayer who does not
California Legislative Update – June 2021
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participate in the program is subject to a 7.75% penalty on outstanding tax liabilities. This bill requires
FTB and CDTFA to maximize public awareness of the program, which must be conducted from
September 1, 2022, to October 31, 2022.
Status: Held on the Assembly Appropriations Suspense File, two-year bill
Cal Cities Position: Watch
CSAC Position: Watch
AB 906 (Carrillo) Zero-emission Trucks: Tax and Fee Exemptions.
Exempts zero emission heavy duty trucks from sales tax, vehicle license fees, registration fees, and weight
fees. Cal Cities is watching this measure and will take it to their policy committee. Cal Cities staff
expressed concerns that exempting zero emissions vehicles from taxes and fees sets a difficult precedent
as these vehicles are likely to be the standard in the future resulting in a significant negative impact on
cities’ tax and fee revenues. Cal Cities is advocating for the Legislature to take a different policy approach
in encouraging wider adoption of zero emission trucks and vehicles.
Status: Referred to the Assembly Revenue and Taxation and Transportation Committees, failed deadline,
two-year bill
Cal Cities Position: Watch
CSAC Position: None
AB 1121 (Rodriguez) Sales and Use Taxes. Emergency Preparation Items.
Exempts specified emergency preparedness items beginning at 12:01 a.m. on the Saturday before the last
Monday in June and ending at midnight on the last Monday in June, beginning January 1, 2022 until
January 1, 2024.
Status: Referred to the Assembly Revenue and Taxation Committee
Cal Cities Position: Oppose
CSAC Position: Oppose, Unless Amended
SB 771 (Becker) Sales and Use Taxes. Zero Emission and Hybrid Vehicles Exemption.
Enacts a state-only (3.9375%) sales and use tax exemption for zero emission or hybrid vehicles purchased
under the Clean Cars 4 All Program.
Status: Awaiting referral to a policy committee in the Assembly
Cal Cities Position: Watch
CSAC Position: Neutral
Note: Amendments neutralized Cal Cities and CSAC opposition.
Soda Tax
AB 1163 (Nazarian) Local Government: taxation: prohibition: groceries.
Restores local authority to tax carbonated non-alcoholic beverages.
Status: Referred to the Assembly Revenue and Taxation Committee, two-year bill
Cal Cities Position: Watch
CSAC Position: Pending
Online Sales
AB 1402 (Levine) Marketplace Facilitator: Fee Collection.
This bill will require online retailers to collect environmental impact fees on products purchased online,
similar to the fees charged on certain products at brick-and-mortar stores. Such fees include the California
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Tire Fee, Covered Electronic Waste (eWaste) Fee, Lead-Acid Battery Fee, and Lumber Products
Assessment.
Status: Referred to the Senate Governance and Finance Committee
Cal Cities Position: Watch
CSAC Position: Watch
SB 792 (Glazer) Sales and Use Tax Retailers. Reporting.
Requires online retailers with over $1 million in sales to report to the CDTFA a schedule that reports the
gross receipts from sales of property for each local jurisdiction where it shipped or delivered to a
purchaser in that jurisdiction. This bill is intended to help the CDTFA map out the flow of payments and
shipments. According to Cal Cities, this bill would require reporting and information gathering, but would
not impact the County Pool Use Allocations.
Status: Awaiting referral to a policy committee in the Assembly
Cal Cities Position: Support
CSAC Position: Pending
Business and Property Taxes
AB 1181 (Nguyen) Local Restaurant Fee Prohibition and Refunds.
Prohibits cities and counties from imposing or collecting license fees from restaurants from January 1,
2020 to December 31, 2021. Requires a full refund of any collected fees. According to Cal Cities, this
measure is a one size fits all approach that could have significant negative impacts for city budgets. Cal
Cities further argues that cities across the state have already been working with their local businesses to
waive fees and make other accommodations to soften the impacts of COVID-19.
Status: Referred to the Assembly Governmental Organization and Health Committees, two-year bill.
Cal Cities Position: Oppose
CSAC Position: Oppose
SB 219 (McGuire) Property Taxation: Delinquent Penalties and Costs: Cancellation: Public Health
Orders.
Provides tax collectors the authority to provide penalty relief to delinquent taxpayers due to a documented
hardship, resulting from a shelter-in-place order, as defined, issued by the Governor or the public health
officer of a city, county, or city and county in which the property is located, or its owner resides.
Taxpayers would have to pay the principal to receive penalty relief. According to the author, “SB 219
creates much needed relief for both taxpayers and tax collectors by giving tax collectors the discretion to
cancel penalties accrued as a direct result of health and safety orders. SB 219 reflects the tax collectors’
collective experience of a crisis and puts that experience into action. The bill will ensure that our local
governments are positioned and prepared to function in an uninterrupted fashion during a crisis, and yet
be nimble enough to help individuals in their time of hardship.”
Status: Referred to the Assembly Revenue and Taxation Committee
Cal Cities Position: Support
CSAC Position: Support
SB 539 (Hertzberg) Property Taxation: Taxable Value Transfers.
Implements two new sections of property tax law to assist implementation of Proposition 19 (2020).
Proposition 19, otherwise known as the Home Protection for Seniors, Severely Disabled, Families, and
Victims of Wildfire or Natural Disasters Act. Specifically, the bill clarifies responsibilities,
documentation, and oversight. Last year, the Legislature placed the measure on the ballot, and voters
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approved Proposition 19. Among other provisions, Proposition 19 created a new section of the California
Constitution to allow base year value transfers for disabled taxpayers and persons over the age of 55, as
well as victims of wildfires or other natural disasters. Specifically, Proposition 19 allowed taxpayers, as
defined, to transfer base year values to properties of greater value and across county lines regardless of
whether the accepting county enacted an ordinance, so long as the replacement property is purchased or
constructed within two years of the date the original property is sold, or damaged or destroyed by a
disaster. According to the author, SB 539 makes several clarifying changes to relevant statutory
provisions to eliminate confusion and ensure Proposition 19 is consistently implemented throughout
California.
Status: Awaiting referral to a policy committee in the Assembly
Cal Cities Position: Watch
CSAC Position: Support
Short Term Rentals
SB 60 (Glazer) Residential Short-term Rental Ordinances. Health or Safety Infractions. Maximum
Fines.
Raises the maximum fines for a violation of an ordinance relating to a residential short-term rental. A
violation that is an infraction and poses a threat to health or safety would incur a fine of $1,500 for a first
violation, and $3,000 for a second violation of the same ordinance within one year of the first violation.
Status: Referred to the Assembly Local Government Committee
Cal Cities Position: Support
CSAC Position: Pending
SB 555 (McGuire) Online Short-Term Rental Facilitator Program.
Provides an opt-in program for cities to delegate short-term rental Transient-Occupancy Tax (TOT)
collection authority to the CDTFA. Requires short term rental platforms to register with the CDTFA and
collect TOT.
Status: Awaiting referral to a policy committee in the Assembly
Cal Cities Position: Oppose, Unless Amended
CSAC Position: Pending
Note: According to Cal Cities, “As currently drafted, this measure could unfortunately result in less
effective and less transparent TOT collection in addition to the swift termination of existing and future
voluntary collection agreements. Any option to contract with CDTFA should be effective and transparent.
This measure should be amended to require platforms to provide CDTFA and contracting cities robust
rental information to ensure proper collection, protect existing arrangements, protect local tax rates and
charges as adopted by contracting agencies, and clarify that this measure does not pre-empt any local
short-term rental ordinances.
Economic Development
SB 696 (Allen) Enhanced Infrastructure Financing Districts Powers.
Provides Enhanced Infrastructure Financing Districts (EIFDs) with powers to acquire property and utilize
eminent domain similar to powers provided to Community Revitalization and Investment Authorities
(CRIAs). Allows the State to participate in EIFDs and contribute to state resources.
Status: Two-year bill
Cal Cities Position: Watch
CSAC Position: Watch
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SB 780 (Cortese) Local Finance: Public Investment Authorities.
Makes several revisions to the EIFD and CRIA laws intended to further incentivize their use and attract
investors. Removes the 10-year protest provision.
Status: Referred to the Assembly Housing and Community Development Committee
Cal Cities Position: Support
CSAC Position: Watch
Development Fees and Financing
SB 8 (Skinner) Housing Crisis Act of 2019.
Extends the sunset date for the Housing Crisis Act of 2019 from 2025 to 2030. The Housing Crisis Act
declared a statewide housing crisis and froze nearly all development related fees once a developer submits
a “preliminary” application, including essential project specific fees.
Status: Referred to the Assembly Housing and Community Development Committee and set for hearing
June 22.
Cal Cities Position: Watch
CSAC Position: Watch
SB 695 (Ochoa Bogh) Mitigation Fees.
Makes numerous changes to how cities impose development fees, including expanding nexus study
requirements to include dedications of parkland or in-lieu fees imposed under the Quimby Act and
construction excise taxes. Prohibits a housing impact requirement from exceeding the amount necessary
to maintain the existing level of service identified in the nexus study for the type of capital facility for
which the housing impact requirement is imposed.
Status: Two-year bill
Cal Cities Position: Watch
CSAC Position: Pending
ACA 1 (Aguiar-Curry) Local Government Financing. Affordable Housing and Public
Infrastructure. Voter Approval.
Reduces the voting threshold to 55% for ad valorem taxes to service bonded indebtedness incurred to fund
the construction, reconstruction, rehabilitation, or replacement of public infrastructure, affordable
housing, or permanent supportive housing, or the acquisition or lease of real property for those purposes.
Status: Referred to the Assembly Local Government Committee
Cal Cities Position: Watch
CSAC Position: Support
Cannabis
SB 59 (Caballero) Cannabis provisional licenses: local equity applicants.
Prohibits a licensing authority from issuing a new provisional license to an applicant on or after July 1,
2022, unless the applicant is a qualified equity applicant, as defined by the California Cannabis Equity
Act, and authorizes a licensing authority to reinstate a provisional license issued prior to July 1, 2022, to
an applicant for the same activity previously licensed at the location. This bill also extends the repeal date
of these provisional license provisions to January 1, 2028, and makes findings and declarations that this
bill furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act.
Status: Two-year bill
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Cal Cities Position: Watch
CSAC Position: Support
SB 398 (Skinner) Cannabis Licenses. Cannabis Licensing Agreements. Cannabis Excise Tax.
Establishes a process for the Bureau of Cannabis Control to administer commercial cannabis licensing,
permitting, or other regulatory activities on behalf of a local jurisdiction pursuant to a cannabis licensing
agreement and imposes new labor peace agreement requirements for cannabis license applicants.
Status: Two-year bill
Cal Cities Position: Watch
CSAC Position: Watch
Broadband
AB 14 (Aguiar-Curry) Communications: Broadband Services: California Advanced Services Fund.
Eliminates the sunset of the California Advanced Services Fund, authorizes the collection of an
unspecified surcharge on intrastate telecommunications service costs to continue grants, and makes
various modifications to the program including redefining unserved households and prioritizing grant
disbursements.
Status: Awaiting referral to a policy committee in the Senate
Cal Cities Position: Support
CSAC Position: Support
AB 537 (Quirk) Communications: wireless telecommunications and broadband facilities.
Makes several changes to existing law that requires an application for a wireless telecommunications
facility to be deemed approved.
Status: Double referred to the Senate Committees on Energy, Utilities, and Communications and
Governance and Finance
Cal Cities Position: Watch
CSAC Position: Neutral
SB 28 (Caballero) Rural Broadband and Digital Infrastructure Video Competition Reform Act.
Expands the authority of the California Public Utilities Commission (CPUC) to regulate cable video
franchises, modifies annual data reporting requirements for video service provider holding a state video
franchise, requires the CPUC to consult with local governments regarding franchise violations, and
requires the CPUC to evaluate a franchisee’s service obligations.
Status: Double referred to the Assembly Committees on Communications and Conveyance and Privacy
and Consumer Protection
Cal Cities Position: Watch
CSAC Position: Support
SB 743 (Bradford) Housing Developments: Broadband Adoption: Grant Program.
Requires the CPUC to establish a new grant program to fund broadband adoption, digital literacy
programs, and computer equipment at public housing communities.
Status: Double referred to the Assembly Committees on Communications and Conveyance and Housing
and Community Development Cal Cities Position: Watch CSAC Position: Pending
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