HdL Sales Tax Report for CY2019 Q2 SalesSales Tax Update
In Brief
Top 25 producers
In AlphAbetIcAl Order
www.hdlcompanies.com | 888.861.0220
Q22019
Encinitas
Encinitas’ receipts from April
through June were 28.7% above
the second sales period in 2018.
However, this comparison is inflated
due to CDTFA’s transition to a new
reporting system. Excluding report-
ing aberrations, actual sales were
up 0.5%.The rise in the countywide use tax
allocation pool offset the decline in
most industry groups on an actu-
al basis. In addition, new eateries
contributed to the 2.6% increase in
restaurants.Once adjusted, general retail
slipped 4.8%. Most sectors were
lower than a year ago with the ex-
ception of men’s apparel. Multiple year-ago state-related dis-
bursement issues accounted for the
decrease in autos and transporta-
tion. A recent opening pushed up
actual results by 1.1%.Net of aberrations, taxable receipts
for all of San Diego County grew
1.4% over the comparable time pe-
riod; the Southern California region
was up 2.6%.
City of Encinitas
Third Quarter Receipts for Second Quarter Sales (April - June 2019)
Published by HdL Companies in Fall 2019
7 Eleven
76
Best Buy
BMW of Encinitas
Cardiff Seaside Market
Chevron
Dick’s Sporting Goods
Encinitas Ford
Encinitas Gasoline & Auto Service
Financial Services Vehicle Trust
Hansen Surfboards
Herman Cook Volkswagen
Home Depot
Home Goods
Pacific Coast Grill
Quick Shine Car Wash
REI
Shell
Shell Car Wash At Encinitas Ranch
Target
TJ Maxx
USA Gasoline
Valero
Vons
Walmart Supercenter
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
SALES TAX BY MAJOR BUSINESS GROUP
2nd Quarter 2018
2nd Quarter 2019
General
Consumer
Goods
Restaurants
and
Hotels
County
and State
Pools
Autos
and
Transportation
Fuel and
Service
Stations
Food
and
Drugs
Building
and
Construction
Business
and
Industry
$14,709,987 $12,636,481
6,413 6,363
2,021,121 1,682,024
$12,682,452 $10,948,094
2018-192017-18
Point-of-Sale
County Pool
State Pool
Gross Receipts
REVENUE COMPARISON
Four Quarters – Fiscal Year To Date (Q3 to Q2)
NOTESSales Tax UpdateQ2 2019 City of Encinitas
$0
$2,000
$4,000
$6,000
$8,000
SALES PER CAPITA
Encinitas
Q2
16
Q2
19
Q2
17
Q2
18
County California
25%
Cons.Goods
19%Restaurants
15%Pools
13%
Autos/Trans.
10%Fuel
8%Food/Drug7% BuildingBus./Ind.
Encinitas This QuarterREVENUE BY BUSINESS GROUP
5%
Q2 '19*
Encinitas
ENCINITAS TOP 15 BUSINESS TYPES
Business Type Change Change Change
County HdL State*In thousands of dollars
-52.0%-48.7%-48.0% 72.9 Auto Lease — CONFIDENTIAL —
78.4%34.1%25.3% 182.8 Building Materials — CONFIDENTIAL —
33.1%24.5%21.1% 322.9 Casual Dining
6.1%14.9%12.4% 71.5 Convenience Stores/Liquor
36.6%26.3%22.5% 198.2 Discount Dept Stores — CONFIDENTIAL —
-28.1%7.0%-4.4% 70.6 Electronics/Appliance Stores
31.7%45.3%50.0% 85.9 Family Apparel
12.4%18.9%19.1% 105.7 Fast-Casual Restaurants
14.6%9.6%3.0% 155.0 Grocery Stores
0.9%15.8%15.5% 110.5 Home Furnishings
3.1%5.4%4.7% 268.6 New Motor Vehicle Dealers — CONFIDENTIAL —
25.2%15.9%15.4% 176.4 Quick-Service Restaurants
286.2%51.4%46.0% 333.5 Service Stations
-8.3%-8.5%-14.4% 61.0 Specialty Stores
151.6%29.7%30.6% 131.1 Sporting Goods/Bike Stores
20.1%16.9%28.0%
33.1%
28.7%
2,964.6
504.5
3,469.1
Total All Accounts
County & State Pool Allocation
Gross Receipts
21.5%22.4%
17.5%20.4%
California Overall
The local one percent share of Cal-
ifornia’s sales and use tax from April
through June sales was 20.4% higher
than the same quarter of 2018. How-
ever, the actual gain came to 2.9% after
factoring for online filing issues and ac-
counting anomalies. Fiscal year 2018-19
ended with an increase of 3.6% over the
previous year after similarly adjusting
for reporting aberrations.
The quarter exhibited continuation
of a recent softening for most taxable
categories. Rising used car sales and
rentals helped offset what was other-
wise, a generally flat quarter for the
auto-transportation group. An accel-
eration in online shopping boosted
receipts from county wide pools while
gains for brick and mortar stores were
limited to value priced apparel, discount
department stores and jewelry.
Restaurant patronage appears to be
leveling with a shift toward lower cost
dining options that produced relative-
ly modest gains for the group when
compared to previous quarters. New
cannabis operations resulted in a small
rise in food and drug receipts.
A 2.5% gain in business-industrial sales
and use tax revenues came primarily
from online fulfillment centers, logis-
tics and utility company purchases and
ongoing investment in automation and
information technology. A similar rise
in receipts from the building-construc-
tion group was due to a variety of infra-
structure and onetime special projects
that offset declines in material purchases
for new home construction.
Marketplace Facilitator Act
Effective Oct. 1, 2019, companies such
as Amazon, eBay and Google who pro-
vide sales tax related services to other
retailers are required to assume the obli-
gation for collecting and remitting their
client’s sales and use tax. The definition
of sales-related services includes payment
processing, inventory and shipping of
merchandise, order taking, providing
customer service, or assisting with re-
turns and exchanges.
The Marketplace provision was part of
AB 147 which was adopted to imple-
ment California’s approach to the U.S.
Supreme Court decision in South Da-
kota v. Wayfair Inc.
AB 147 requires out-of-state retailers
with annual combined sales of $500,000
or more to now collect and remit this
state’s sales and use tax from its custom-
ers. Applying the $500,000 threshold to
the sum total of all the third-party trans-
actions that facilitators process for their
clients, is hoped to produce moderate
gains in previously uncollected revenues
for the state, cities, counties and local
transaction tax districts.
Facilitator tax remittances from mer-
chandise inventoried in California will
be allocated to specific jurisdictions
while receipts from deliveries outside of
the state will be distributed via the pools.
Some facilitators have begun to collect
and remit taxes ahead of this deadline.
This is evidenced by new pool alloca-
tions and increases in direct allocations
to certain jurisdictions.