Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2021
Additional Local Taxes
CHAPTER 2. COUNTIES TRANSACTIONS AND USE TAX
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.