Tax Revenue Sharing Agreements for Jurisdictions

Assembly Bill No. 2854 (Stats. 2024, ch. 842) added section 7213 to the Revenue and Taxation Code (RTC). This guide provides information about the reporting and publication requirements RTC section 7213 imposes on a local agency, as defined in Government Code section 53084.5. Emergency Regulation 1808, approved in March 2025, clarifies the administration of RTC section 7213.

RTC section 7213 provides that "rebated sales and use tax revenues" means any direct or indirect payment, transfer, diversion, or rebate of any tax revenue resulting from the imposition of a sales and use tax under the Bradley-Burns Uniform Local Sales and Use Tax Law (Bradley-Burns) (commencing with RTC section 7200) to any person pursuant to an agreement (tax revenue sharing agreement). Revenue and Taxation Code section 7213 requires local jurisdictions to report to the CDTFA by April 30 of each year specified information regarding any agreement that resulted in rebated sales and use tax revenues during the immediately preceding fiscal year. Most local jurisdictions have submitted reports to the CDTFA by this due date. If your jurisdiction has not, please do so as soon as possible. Additionally, please note that as defined by subdivision (a)(2) of section 7213, rebated sales and use tax revenues means “any direct or indirect payment, transfer, diversion, or rebate of any tax revenue . . . to any person pursuant to an agreement.”

Rebated sales and use tax revenues are not limited to the transfer of revenue to the retailer that paid the tax originally, or to a person associated with that retailer, and may include tax revenues paid to a local sales tax consultant, such as payments on a contingency basis or otherwise, resulting from a petition for redistribution of local tax.

Beginning January 1, 2025, RTC section 7213 requires each local agency to annually report information concerning tax revenue sharing agreements in effect for the previous fiscal year to CDTFA. Tax revenue sharing agreements include those agreements resulting in the direct or indirect payment, transfer, diversion, or rebate of Bradley-Burns local tax revenues.

Additionally, if a local agency has any tax revenue sharing agreements to report to the CDTFA, RTC section 7213 requires the local agency to also publish the information reported about the tax revenue sharing agreements on its website and maintain a visible hyperlink to the webpage containing the published information on the homepage of the local agency's website at all times.

Reporting Requirements

RTC section 7213 and Regulation 1808 require each local agency to report information to CDTFA annually, on or before April 30, for the preceding fiscal year, even if they do not have any tax revenue sharing agreements to report. A fiscal year is defined as July 1 through June 30. The first information reporting due date is on April 30, 2025. Each local agency will receive a reminder to file notification email containing a link to a form to report the information required by RTC section 7213 to CDTFA.

Emergency Regulation 1808 requires every local agency to report the following information on their reporting form:

The local agency's jurisdiction code number. A link to this information is provided below.
The end date of the fiscal year (e.g., June 30, 2024) for which information is being reported.
Whether the local agency rebated sales and use tax revenue pursuant to a tax revenue sharing agreement during the fiscal year for which information is being reported.
The name, title, and email address of the person completing the form and their statement that "I herby certify that this report has been examined by me and to the best fo my knowledge and belief is a true, correct, and complete report."

RTC section 7213 requires the following information to be reported to CDTFA by a local agency for each tax revenue sharing agreement that resulted in rebated sales and use tax revenue during the immediately preceding fiscal year:

The name or names of parties to the agreement.
The date the agreement was originally executed.
The date the agreement terminated or will terminate, absent any renewal.
The total dollar amount of rebated sales and use tax revenues received by each party to the agreement on or after the date of execution of the agreement through and including June 30 of the fiscal year immediately preceding the date of the report.
The total dollar amount of rebated sales and use tax revenues received by each party to the agreement during the fiscal year immediately preceding the date of the report.
The percentage of a retailer's sales and use taxes, if any, used to calculate or otherwise determine the rebated sales and use tax revenues received by each party to the agreement.
The percentage of a retailer's sales and use taxes, if any, used to calculate or otherwise determine the rebated sales and use tax revenues received by any other person who is not a party to the agreement.

Under Emergency Regulation 1808, if a local agency reports that it has tax revenue sharing agreements, then the local agency must also state on their reporting form whether the information reported about tax revenue sharing agreements is published on the local agency's website in the manner required by RTC section 7213.

If a local agency has not directly or indirectly paid, transferred, diverted, or rebated any sales and use tax revenues pursuant to an agreement in the immediately preceding fiscal year, then RTC section 7213 requires the local agency to report that fact to CDTFA and exempts the local agency from the publication requirements applicable to tax revenue sharing agreements.

Publishing Requirements

RTC section 7213 requires a local agency to publish the information submitted to CDTFA about each tax revenue sharing agreement on its website. It also requires a hyperlink to the internet webpage containing the information to be present and visible on the homepage of the local agency's website at all times.

RTC section 7213 requires CDTFA to publish the information reported to it about each tax revenue sharing agreement. Starting June 1, 2025, and updated annually, this information is available on the Revenue Tax Sharing Agreement Reported by Jurisdictions, which is located on CDTFA's Open Data Portal.

Local Agency (Jurisdiction) Code Lookup (5 digits)

A local agency (jurisdiction) code is needed to report the information required by RTC section 7213. The link below provides a listing of local agency (jurisdiction) codes.

Jurisdiction Codes

A local agency must file a report even if it does not have any tax revenue sharing agreements. Local agencies will need to access the electronic link provided by CDTFA to report no agreements. Local agencies without tax revenue sharing agreements are exempt from the requirement of publishing reports on their websites.

Extensions

If a local agency does not timely provide the information required or does not publish the required information on its internet website, RTC section 7213 requires CDTFA to notify the local agency by certified mail that it has 45 days from the mailing of the notice to provide or publish the required information or submit a statement to CDTFA explaining why it is unable to provide or publish the required information within the 45-day period.

If a local agency submits such a statement, RTC section 7213 provides that CDTFA may extend the 45-day period to provide or publish the required information by 30 days if the local agency demonstrates that the failure to timely comply with the applicable requirement was due to reasonable cause and circumstances beyond the local agency's control, occurred notwithstanding the exercise of ordinary care, and occurred in the absence of willful neglect. RTC section 7213 also provides that CDTFA shall not grant an extension for a local agency based on the local agency's claim that the information is confidential.

A local agency may use CDTFA-868, Request for Extension (Tax Revenue Sharing Agreements), to submit a statement to CDTFA. A local agency may send a statement to CDTFA, including a completed CDTFA-868, Request for Extension (Tax Revenue Sharing Agreements), by email to our Local Revenue Branch at ab2854reporting@cdtfa.ca.gov.

If CDTFA grants an extension, RTC section 7213 requires CDTFA to notify the local agency by certified mail that it has 30 days to provide or publish the required information commencing on the next business day following the expiration of the 45-day period.

If CDTFA declines to grant an extension, RTC section 7213 requires the local agency to provide or publish the required information within 10 days after CDTFA notifies the local agency by certified mail that it has denied the extension.

RTC section 7213 requires a CDTFA notice granting or denying an extension to be addressed to the person authorized to receive confidential data at the local agency's address as it appears in CDTFA's records. RTC section 7213 also provides that the mailing of the notice shall be deemed complete at the time of the deposit of the notice in the United States Post Office, or a mailbox, sub-post office, substation or mail chute, or other facility regularly maintained or provided by the United States Postal Service, without extension of time for any reason. To verify or update the person authorized to receive confidential data at a local agency, please email CDTFA's Local Revenue Branch at ab2854reporting@cdtfa.ca.gov.

Penalties

If a local agency does not report or publish the information required by RTC section 7213 within the applicable period, RTC section 7213 provides that CDTFA may impose a penalty for each day after the expiration of the applicable period the local agency fails to provide or publish the information, up to 365 days after the expiration of the applicable period, as follows:

For days one to 180, inclusive, one thousand dollars ($1,000) per day.
For days 181 to 365, inclusive, four thousand dollars ($4,000) per day.

Payments

If a local agency must make a payment for any accrued penalties, please send a check to:

California Department of Tax and Fee Administration
P.O. Box 942879
Sacramento, CA 94279

Frequently Asked Questions (FAQs)

How do I report my tax revenue sharing agreements?

Please email CDTFA's Local Revenue Branch at ab2854reporting@cdtfa.ca.gov for the reporting link.

What is our local agency's jurisdiction code?

Your local agency's jurisdiction code can be found here: Jurisdiction Code Lookup. The code is the five-digit jurisdiction code displayed when “Local” is listed as the jurisdiction type.

Do we still need to publish a report on our website if we have no tax revenue sharing agreements?

No, you do not need to publish on your website. You must publish only when you have tax revenue sharing agreements that had to be reported. However, all local agencies must report to the CDTFA whether they have tax revenue sharing agreements or not.

Our city/ county has property tax and district tax agreements that are completely unrelated to Bradley-Burns local tax revenue. Do we have to publish and report on those as well?

No, the publishing and reporting requirements are only for tax revenue sharing agreements related to the Bradley-Burns local tax.

I have an agreement with another government agency. Would this qualify under AB 2854?

No. As defined by RTC section 7213, rebated sales and use tax revenues means “any direct or indirect payment, transfer, diversion, or rebate of any tax revenue . . . to any person pursuant to an agreement.” As such, it is not limited to the transfer of revenue to the retailer that paid the tax originally, or to a person associated with that retailer. It may include tax revenue paid to a local sales tax consultant, on a contingency basis or otherwise, resulting from a petition for redistribution of local tax.

Can local agencies combine their reporting and publishing responsibilities?

No, all local agencies (which include all cities, counties, and cities and counties) must report and potentially publish.

How can I sign up for important due date reminders for AB 2854 reporting?

Please submit your contact information to ab2854reporting@cdtfa.ca.gov.

The person who reports on our tax revenue sharing agreements is leaving our local agency. How can I update our contact information?

Please submit your contact information to ab2854reporting@cdtfa.ca.gov.

If we received a share of sales tax revenue, would we report we have no tax revenue sharing agreements since we didn't rebate?

Yes. The reporting requirement is only for agreements between a local agency and a retailer and when there is a direct or indirect sale and use tax rebate.

Due to the personnel changes over the years, we are unable to locate copies of tax revenue sharing agreements. Is it possible to obtain a copy?

CDTFA does not have tax revenue sharing agreements entered by a local agency and a retailer.

Are contracts with local tax consultants reportable tax revenue sharing agreements?

Yes, depending on the terms of the contract, agreements with local tax consultants for the valid FY fiscal year may need to be reported. Rebated sales and use tax revenues are not limited to the transfer of revenue to the retailer that paid the tax originally, or to a person associated with that retailer.

Can I make changes to my report?

If you need to make changes to your report, you will need to re-file your submission with all tax revenue sharing agreements, including those that you have previously reported.

Where can I find a copy of my filing from last year?

If you have reported agreements during prior reporting periods, you may access the reported data in the Revenue Tax Sharing Agreement Reported by Jurisdictions report is located on CDTFA's Open Data Portal.

Questions

For questions concerning the new tax revenue sharing agreement reporting and publication requirements, please contact our Local Revenue Branch by calling 1-916-309-5800 or by emailing us at ab2854reporting@cdtfa.ca.gov.