HdL Sales Tax Report for CY2019 Q3 SalesSales Tax Update
In Brief
Top 25 producers
In AlphAbetIcAl Order
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Q32019
Encinitas
Encinitas’ receipts from July
through September were 16.5%
below the third sales period in
2018. However, this comparison is
skewed due to the CDTFA’s transi-
tion to a new reporting system in the
prior year when additional payments
were received by the City. Excluding
reporting aberrations, actual sales
were down 0.2%.Weak summer returns from home
furniture vendors and other retail-
ers pulled general consumers lower.
Slightly lower gas prices compared
to the prior year negatively impact-
ed fuel-service stations.The recent closeout of a build-
ing-construction merchant and a
one time allocation in the compar-
ison period also hindered revenue
growth.Although local point of sale results
were down, increased taxes collect-
ed for online purchases of items
shipped into the region compared to
last year, enhanced allocations from
the countywide use tax pool, partial-
ly offsetting the decline.Net of aberrations, taxable sales
for all of San Diego County grew
2.8% over the comparable time pe-
riod; the Southern California region
was up 2.8%.
City of Encinitas
Fourth Quarter Receipts for Third Quarter Sales (July - September 2019)
Published by HdL Companies in Winter 2020
7 Eleven
76
Best Buy
BMW of Encinitas
Cardiff Seaside Market
Chevron
Dick’s Sporting Goods
Encinitas Ford
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
Vuori
Walmart Supercenter
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
SALES TAX BY MAJOR BUSINESS GROUP
3rd Quarter 2018*
3rd 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
*Allocation aberrations have been adjusted to reflect sales activity
$3,615,048 $4,330,607
1,237 1,956
533,136 565,688
$3,080,675 $3,762,963
2019-202018-19
Point-of-Sale
County Pool
State Pool
Gross Receipts
REVENUE COMPARISON
One Quarter – Fiscal Year To Date (Q3)
NOTESSales Tax UpdateQ3 2019 City of Encinitas
$0
$1,000
$2,000
$3,000
$4,000
SALES PER CAPITA *
Encinitas
Q3
16
Q3
19
Q3
17
Q3
18
County California
*Allocation aberrations have been adjusted to reflect sales activity
25%
Cons.Goods
19%
Restaurants
15%
Pools
13%
Autos/Trans.
10%
Fuel
8%
Food/Drug8%
Building4%
Bus./Ind.
Encinitas This Quarter*REVENUE BY BUSINESS GROUP
*Allocation aberrations have been adjusted to reflect sales activity
Q3 '19*
Encinitas
ENCINITAS TOP 15 BUSINESS TYPES**
Business Type Change Change Change
County HdL State*In thousands of dollars
1.0%4.6%-1.0% 74.9 Auto Lease
-4.9%0.2%0.3% 198.2 Building Materials — CONFIDENTIAL —
2.8%2.3%3.3% 316.9 Casual Dining
2.1%1.0%1.2% 72.4 Convenience Stores/Liquor
-4.0%2.8%2.1% 208.3 Discount Dept Stores — CONFIDENTIAL —
-6.3%-3.1%-4.4% 87.4 Electronics/Appliance Stores
-3.7%1.5%2.6% 84.4 Family Apparel
0.0%5.1%3.9% 113.7 Fast-Casual Restaurants
-0.4%1.7%2.3% 159.7 Grocery Stores
-14.4%-1.0%6.0% 102.9 Home Furnishings
1.6%-7.2%-2.3% 278.8 New Motor Vehicle Dealers — CONFIDENTIAL —
1.8%2.6%0.8% 173.4 Quick-Service Restaurants
-6.3%-1.5%-3.7% 347.4 Service Stations
-2.9%0.3%-1.0% 62.5 Specialty Stores
2.2%-1.4%0.1% 141.4 Sporting Goods/Bike Stores
0.3%0.6%-1.4%
7.1%
-0.2%
2,997.5
511.0
3,508.5
Total All Accounts
County & State Pool Allocation
Gross Receipts
18.3%14.9%
2.8%2.3%
** Accounting aberrations such as late payments, fund transfers, and audit adjustments
have been adjusted to reflect the quarter in which the sales occurred.
Statewide Results
The local one-cent share of statewide
sales and use tax from sales occurring
July through September was 2.2% high-
er than the summer quarter of 2018 after
adjusting for accounting anomalies.
The bulk of the increase came from the
countywide use tax allocation pools and
is due to the acceleration in online shop-
ping where a large volume of the orders
are shipped from out-of-state.
Online shopping also produced gains
in the business-industrial group with
in-state industrial zoned logistics cen-
ters filling orders previously taken by
brick and mortar retailers. Purchases
to support healthcare, food processing,
logistics/warehouse operations and in-
formation/data technology also helped
offset declines in other business-related
categories.
With the exception of some discount
and value-oriented retail, most categories
of general consumer goods were down.
New cannabis related start-ups offset
declines in the food and drug group
while a softening in building-construc-
tion receipts was consistent with recent
declines in the volume and value of new
building permit issuances.
Overall growth in restaurant receipts
continued to soften with a shift toward
lower cost dining establishments and
takeout meal options. Reports of labor
shortages and the impact of homeless-
ness on customer traffic in metropolitan
areas were reportedly factors in the de-
cline in tax revenues from higher price,
fine dining establishments.
Despite a slight uptick in used auto and
auto lease receipts, the auto related group
was significantly down due to a drop
in new car and RV sales. Previously
propped up by a 23% subprime rated
customer base and six- and seven-year
financing, loan delinquencies have re-
cently surged back to levels last seen in
2009.
Additional Tax Districts Approved
Voters approved eight of the nine sales
tax measures on the November 2019
ballot adding six new districts and ex-
tending two others.
This brings the total number of lo-
cal transactions and use tax districts
(TUT’s) to 325 with 62 that are lev-
ied countywide and 263 imposed by
individual cities. The number of local
districts have close to tripled over the last
decade as agencies deal with rising costs
and service needs. TUT’s have been a
favorable option as visitors contribute to
the tax and a collection system is already
in place that minimizes administrative
and monitoring costs.
California’s basic rule is that the rate
for all local TUT’s combined, shall not
exceed 2.0% or a total of 9.25% includ-
ing the state levy. However, the state
legislature has authorized higher caps
in some jurisdictions with the highest
voter-approved, combined state/local
rate now at 10.5%.
Thirty-five or more additional local
TUT measures are currently being
considered for the March 2020 ballot.