The San Benito County Board of Supervisors is scheduled to discuss Feb. 8 putting a sales tax measure on the November 2022 ballot.
In a staff report to the board, a 1% sales tax increase is used as the basis for estimating additional revenue. However, the report does not specify how much the board might propose increasing the sales tax rate.
According to the agenda packet, supervisors will consider a sales tax increase, which is currently 8.25% in the unincorporated areas of the county. Hollister’s sales tax is 9.25% and San Juan Bautista’s is 9%.
Sales taxes in California range from 7.25% to 10.75%, with the statewide average being 8.49%. Here are the sales tax rates in neighboring counties:
- Santa Cruz County: 9%
- Monterey County: 7.75%
- Santa Clara County: 9.13%
- San Luis Obispo County 7.25%
“Sales tax data trends show that an increase in the sales tax rate of 1% has no noticeable effect on the number of taxable goods consumers buy,” the staff report states.
It goes on to say that a 1% increase in sales tax would increase the county’s revenue by an estimated $3.34 million annually.
Any general tax imposed by local governments requires the majority of voters’ approval (50% plus 1 vote). Any special tax imposed by local governments requires 66.67% of voters’ approval.
General taxes are levied to fund government operations and go into an entity’s general fund, while a special tax is levied for a specific purpose such as roads, police or parks.
According to the California State Association of Counties, transactions subject to sales tax totaled about $571 billion in 2016. Of that total, $570 billion was collected in cities and $1 billion was collected in unincorporated areas.
According to the presentation included in the agenda packet, of the 7.25% sales tax that goes to the state, 3.94% goes into the state’s general fund; 1.063% goes into the Revenue Fund 2011 with different accounts; 0.5% goes into a public safety fund; another 0.5% goes to a state fund that supports local health and social services programs and the last 1.25% is split across funds that support county transportation and city/county operations.
If the supervisors opt to propose a sales tax increase, they must submit the measure to the elections department by Aug. 22.
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