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Business Taxes Law Guide—Revision 2024

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Additional Local Taxes

Revenue and Taxation Code

Division 2. Other Taxes
Part 1.7. Additional Local Taxes
Chapter 2. Counties Transactions and Use Tax

7285. Counties authorized to levy tax. The board of supervisors of any county may levy, increase, or extend a transactions and use tax throughout the entire county or within the unincorporated area of the county for general purposes at a rate of 0.125 percent or a multiple thereof, if the ordinance proposing that tax is approved by a two-thirds vote of all members of the board of supervisors and the tax is approved by a majority vote of the qualified voters of the entire county if levied on the entire county or the unincorporated area of the county if levied on the unincorporated area of the county, voting in an election on the issue. The board of supervisors may levy, increase, or extend more than one transaction and use tax under this section, if the adoption of each tax is in the manner prescribed in this section. The transactions and use tax shall conform to Part 1.6 (commencing with Section 7251). The revenues derived from the imposition of a tax pursuant to this section shall only be used for general purposes within the area for which the tax was approved by the qualified voters.

History—Added by Stats. 1987, Ch. 1257, in effect January 1, 1988. Stats. 1990, Ch. 1707, in effect January 1, 1991, deleted "with a population of 350,000 or less on January 1, 1987," from the second sentence and added "0.25 or" to the third sentence. Stats. 1993, Ch. 73, in effect June 30, 1993, deleted "or 0.5" after "0.25", and added "or a multiple thereof" after "percent" in the first sentence; and added the second sentence. Stats. 2001, Ch. 251 (AB 1123), in effect January 1, 2002, added "for general purposes" after "and use tax", and deleted "or resolution" after "if the ordinance" in the first sentence. Stats. 2003, Ch. 709 (SB 566), in effect January 1, 2004, added ", increase, or extend" after "may levy" in the first and second sentences. Stats. 2011, Ch. 176 (AB 686), in effect January 1, 2012, substituted "0.125" for "0.25" after "at a rate of" in the first sentence. Stats. 2014, Ch. 148, (AB 2119), in effect January 1, 2015, added "throughout…the county" after "and use tax", added "entire" after "voters of the", added "if levied….of the county" after "county" in the first sentence, and added the fourth sentence.

Note.—Stats. 1987, Ch. 1257, Section 3 specified that the combined rate of tax imposed in any county by any entity pursuant to Part 1.5 (commencing with Section 7200), Part 1.6 (commencing with Section 7251), this chapter, and any other provision of law authorizing the imposition of local sales or transactions and use taxes shall not exceed 2.25 percent. Neither this chapter nor any ordinance or resolution approved pursuant to this chapter shall affect any tax otherwise authorized.

7285.3. Rate limitation. The combined rate of all taxes imposed in any county pursuant to this chapter and pursuant to Part 1.6 (commencing with Section 7251) shall not exceed the rate specified in Section 7251.1.

History—Added by Stats. 1993, Ch. 73, in effect June 30, 1993. Stats. 1993, Ch. 905 (AB 1519), in effect October 7, 1003, substituted "Sections 7251.3 and 7251.4" for "Section 7251.3" after "as provided in". Stats. 2013, Ch. 76 (AB 383), in effect January 1, 2014, substituted, "Except as provided in Section 7251.3, the", for "The" at the beginning of the section.

7285.4. Commencement date of ordinances. (a) Notwithstanding Section 7265 or 7288.4, or any other provision of law, the imposition of any tax that is levied by an ordinance enacted pursuant to the authority of Section 7285 or Part 1.7 (commencing with Section 7288.1) and approved by the voters at the election to be held on November 2, 1993, may commence on or after January 1, 1994.

(b) This section shall remain in effect only until January 1, 1995, and as of that date is repealed.

History—Added by Stats. 1993, Ch. 73, in effect June 30, 1993.

7285.5. Counties authorized to levy tax for specific purposes. (a) As an alternative to the procedure set forth in Section 7285, the board of supervisors of any county may levy, increase, or extend a transactions and use tax throughout the entire county or within the unincorporated area of the county, as applicable, for specific purposes.

The tax may be levied, increased, or extended at a rate of 0.125 percent, or a multiple thereof, for the purpose for which it is established, if all of the following requirements are met:

(1) The ordinance proposing that tax is approved by a two-thirds vote of all members of the board of supervisors and is subsequently approved by a two-thirds vote of the qualified voters of the entire county if levied on the entire county or the unincorporated area of the county if levied on the unincorporated area of the county, voting in an election on the issue.

(2) The transactions and use tax conforms to the Transactions and Use Tax Law Part 1.6 (commencing with Section 7251).

(3) The ordinance includes an expenditure plan describing the specific projects for which the revenues from the tax may be expended.

(b) A county shall be deemed to be an authority for purposes of Chapter 1 (commencing with Section 55800) of Part 3 of Division 2 of Title 5 of the Government Code.

(c) The revenues derived from the imposition of a tax pursuant to this section shall only be used for specific purposes within the area for which the tax was approved by the qualified voters.

History—Added by Stats. 1989, Ch. 277, in effect August 7, 1989. Stats. 1990, Ch. 1707, in effect January 1, 1991, deleted "with a population of 350,000 or less on January 1, 1987" from the second sentence of the first paragraph; added "0.25 or" to the second sentence of the second paragraph. Stats. 1999, Ch. 643, (AB 1679), deleted "majority" after

"approved by a", and added "in the amount … by law" after "on the issue" in subdivision (a). Stats. 2001, Ch. 251 (AB 1123), in effect January 1, 2002, substituted "levy a transactions and use tax" for "establish an authority" after "any county may", substituted "The tax may be levied" for "An authority so established may impose a transactions and use tax" after "for specific purposes", deleted "or 0.5" after "rate of 0.25", and added ", or multiple thereof," after "percent" in the first paragraph; substituted "all members of the board of supervisors" for "the authority" after "vote of", added "two-thirds" after "approved by a", and deleted "in the amount that is otherwise required by law" after "on the issue" in subdivision (a). Stats. 2003, Ch. 709 (SB 566), in effect January 1, 2004, added ", increase, or extend" after "may levy" in the first sentence, and added ", increased, or extended" after "may be levied" in the second sentence of the first paragraph; and added "the Transactions and Use Tax Law" after "conforms to" in subdivision (b). Stats. 2007, Ch. 504 (AB 1063), in effect October 11, 2007, added subdivision letter designation (a) before first paragraph, renumbered former subdivisions (a), (b), and (c) as (1), (2), and (3), and added new subdivision (b). Note. — Section 3 of Stats. 2007, Ch. 504 (AB 1063) specified that nothing in Chapter 251 of the Statutes of 2001 shall be construed to affect the validity of a transaction and use tax being levied on the effective date of this act by an authority created pursuant to Section 7285.5 of the Revenue and Taxation Code as it read on December 31, 2000, and any tax so levied is hereby declared to be valid for all purposes. Stats. 2011, Ch. 176 (AB 686), in effect January 1, 2012, substituted "0.125" for "0.25" after "at a rate of" in the second paragraph. Stats. 2014, Ch. 148, (AB 2119), in effect January 1, 2015, added "throughout…as applicable," after "and use tax" in the first sentence of subdivision (a); added "entire" after "voters of the" and added "if levied on….of the county," after "county" in paragraph (1) of subdivision (a); added subdivision (c).

Special districts require a super majority of voter approval.—Revenue and Taxation Code Section 7285.5 authorized a county to create an authority that, after a two-thirds vote of the authority, can impose sales tax with a simple majority of voter approval. A tax adopted under this section without a two-thirds vote of the electorate violated proposition 13 which allows impositions of special taxes by special districts only if the tax is approved by at least two-thirds of the voters. Monterey Peninsula Taxpayers Association v. County of Monterey (1992) 8 Cal.App.4th 1520.

7285.8. San Mateo County; additional authority. (a) In addition to any authority established pursuant to Section 7285.5, the Board of Supervisors of the County of San Mateo may establish an authority for the support of public elementary and secondary education in that county. Any authority so established may impose a transactions and use tax at a rate of 0.5 percent for the support of public elementary and secondary education in the County of San Mateo, if all of the following requirements are met:

(1) The ordinance proposing that tax is approved by a two-thirds vote of the governing board of the authority, and is subject to any otherwise applicable voter approval requirement.

(2) The ordinance proposing that tax requires that revenues derived from the tax be allocated only for purposes of public elementary and secondary education within the County of San Mateo. Revenues from the tax, to the extent the tax exceeds the rate authorized under Section 7251.1, shall not be expended in any manner that increases any entitlement to state funding on the part of any local educational agency.

(3) The transactions and use tax conforms to Part 1.6 (commencing with Section 7251).

(b) (1) Revenues from any tax imposed pursuant to this section shall not be considered "allocated local proceeds of taxes" pursuant to Section 41202 of the Education Code or paragraph (2) of subdivision (b) of Section 8 of Article XVI of the California Constitution.

(2) Revenues from any tax imposed pursuant to this section shall supplement, and shall not be offset against, the allocations made pursuant to Section 2558 or 42238 of the Education Code.

History—Added by Stats. 1991, Ch. 369, in effect September 5, 1991.