HdL Sales Tax Report for CY2017 Q1 SalesSales Tax Update
In Brief
Top 25 producers
In AlphAbetIcAl Order
www.hdlcompanies.com | 888.861.0220
Q12017
Encinitas
Encinitas’ receipts from January
through March were flat compared
to the first sales period in 2016. The continuing shift to online pur-
chases and a closed sporting goods
store dampened post-holiday per-
formance in general retail. Multiple deductions to correct pri-
or reporting errors cut revenues in
restaurants compared to a year
ago. Nonetheless, a recent open-
ing boosted results in the fast-casu-
al category. The decrease in general retail and
restaurants was offset by gains
in other segments including the
countywide use tax allocation pool
combined with new enterprises in
business-industry and food-drugs.Net of aberrations, taxable sales
for all of San Diego County grew
2.7% over the comparable time pe-
riod; the Southern California region
was up 2.0%.
City of Encinitas
Second Quarter Receipts for First Quarter Sales (January - March 2017)
Published by HdL Companies in Summer 2017
7 Eleven
Best Buy
BMW of Encinitas
Chevron
Encinitas Ford
Encinitas Gasoline & Auto Service
Financial Services Vehicle Trust
Hansen Surfboards
Herman Cook Volkswagen
Home Depot
Home Goods
Pacific Coast Grill
REI
Quick Shine Car Wash
Rosanos Unocal 76
Scotty Cameron Gallery
Shell Gas & Car Wash
Target
TJ Maxx
Trader Joes
USA Gasoline
Valero
Verizon Wireless
Vons
Walmart Supercenter
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
SALES TAX BY MAJOR BUSINESS GROUP
1st Quarter 2016
1st Quarter 2017
General
Consumer
Goods
Restaurants
and
Hotels
County
and State
Pools
Autos
and
Transportation
Fuel and
Service
Stations
Building
and
Construction
Food
and
Drugs
Business
and
Industry
$0 $(2,522,341)
$12,913,450 $13,106,033
8,807 8,250
1,752,238 1,656,869
$11,152,405 $11,440,914
2016-172015-16
Point-of-Sale
County Pool
State Pool
Gross Receipts
Less Triple Flip*
REVENUE COMPARISON
Four Quarters – Fiscal Year To Date
*Reimbursed from county compensation fund
NOTESSales Tax UpdateQ1 2017 City of Encinitas
$0
$1,000
$2,000
$3,000
$4,000
SALES PER CAPITA
Encinitas
Q1
14
Q1
17
Q1
15
Q1
16
County California
25%
Cons.Goods
17%
Restaurants
14%
Pools
13%
Autos/Trans.
9%
Fuel
8%
Building
8%5% Food/Drug
Bus./Ind.
Encinitas This QuarterREVENUE BY BUSINESS GROUP
Q1 '17*
Encinitas
ENCINITAS TOP 15 BUSINESS TYPES
Business Type Change Change Change
County HdL State*In thousands of dollars
-22.6%1.7%0.3% 45.6 Auto Lease — CONFIDENTIAL —
2.4%3.1%-1.0% 182.6 Building Materials — CONFIDENTIAL —
-10.6%0.5%-2.1% 262.3 Casual Dining
-3.1%3.7%-2.0% 50.8 Convenience Stores/Liquor
0.1%1.6%0.0% 185.2 Discount Dept Stores — CONFIDENTIAL —
-0.1%-0.3%-1.8% 88.8 Electronics/Appliance Stores
-6.4%0.8%-1.4% 71.8 Family Apparel
30.3%9.2%5.6% 64.6 Fast-Casual Restaurants
7.8%0.5%0.8% 133.4 Grocery Stores
3.1%-1.8%-1.7% 104.2 Home Furnishings
8.5%4.4%3.9% 263.4 New Motor Vehicle Dealers — CONFIDENTIAL —
8.3%4.6%4.7% 157.4 Quick-Service Restaurants
0.8%10.0%12.5% 283.8 Service Stations
-4.4%0.1%-2.9% 60.8 Specialty Stores
-9.1%-13.8%-14.7% 100.2 Sporting Goods/Bike Stores
1.8%2.5%-0.6%
3.4%
0.0%
2,604.9
410.5
3,015.5
Total All Accounts
County & State Pool Allocation
Gross Receipts
6.6% 2.9%
3.1% 1.9%
Statewide Results
Local tax receipts from January
through March sales were 2.1%
higher than the first quarter of
2016 after factoring for accounting
anomalies.
Rising fuel prices, auto sales, county
use tax pool allocations and dining
out added most to the overall gain.
Some general consumer goods and
B2B sales were flat or down.
This quarter reflects the start of an
anticipated leveling off of future
tax revenues. After seven years of
recovery, analysts are reporting an
end to the previous pent-up demand
for autos. Demand for new cars will
ease due to more buyers tied to long-
term loans and a glut of used cars
coming off lease.
Price competition and store closures
have reduced tax receipts from
consumer goods. Business investment
remains strong but much of the
growth is for non-taxable items such
as cloud computing and large data
solutions. Declines in foreign tourist
visits and lower costs of eating at home
are expected to slow the growth in
restaurant sales.
New Sales Tax Organization
As of July 1, the operating divisions
responsible for allocation of tax rev-
enues other than property, insurance
and alcoholic beverages will shift from
the State Board of Equalization (BOE)
to the Governor’s new Department of
Tax and Fee Administration.
The BOE was first established by consti-
tutional amendment in 1879 to oversee
property tax assessment practices by all
counties in the state. It eventually be-
came responsible for other tax revenues
including sales, insurance, corporate
franchise and special fees.
In 2011, HdL detected discrepancies
in the BOE’s allocation of public safety
revenues which led to the recovery of
over $124 million in revenues for coun-
ties. Subsequent audits by the State
Controller and State Department of
Finance revealed further shortcomings.
The result was the passage of budget
trailer bill SB86/AB102 that reduces the
BOE to its previous constitutionally de-
fined functions.
The BOE is also empowered to hear ap-
peals and disputes over tax assessments
including sales/use, personal income and
corporate taxes and is the only elected
Tax Board in the United States that
hears tax disputes. Effective January 1,
2018, that function will be turned over
to a new Office of Tax Appeals (OTA)
composed of panels of administrative
law judges appointed by the Governor
with locations in Sacramento, Fresno
and Los Angeles.
For functions other than the appeal pro-
cess, this is primarily a reshuffling of ex-
isting personnel so the change will have
little impact on local agencies. However,
the issue of local government’s ability to
provide input regarding future policy
and regulation changes that impact rev-
enues remains under discussion. HdL
will share more about the BOE transi-
tion as details become available in the
weeks ahead.