HdL Sales Tax Report for CY2017 Q2 SalesSales Tax Update
In Brief
Top 25 producers
In AlphAbetIcAl Order
www.hdlcompanies.com | 888.861.0220
Q22017
Encinitas
Encinitas’ receipts from April
through June were 5.9% above the
second sales period in 2016. Ex-
cluding reporting aberrations, actual
sales were up 3.0%.A new business addition helped
boost revenues for grocery stores.
A negative accounting adjustment
in the same period of the prior year
temporarily inflated results for drug
stores. Higher fuel prices caused
the increase in totals for service sta-
tions.Continued consumer interest in
dining out and several new additions
helped boost revenues for both fine
dining and fast casual restaurants.
Quick-service restaurants also ex-
perienced robust growth this period. General consumer goods report-
ed mixed results, with gain reported
for sporting goods/bike stores and
family apparel. Positive accounting
adjustments were responsible for
the growth in electronics/appliance
stores, while a double payment in
the prior period negatively impacted
totals for home furnishings.The City’s share of the countywide
use tax pool decreased 0.7% from
the comparison period. Net of aberrations, taxable sales
for all of San Diego County grew
2.9% over the comparable time pe-
riod; the Southern California region
was up 3.4%.
City of Encinitas
Third Quarter Receipts for Second Quarter Sales (April - June 2017)
Published by HdL Companies in Fall 2017
7 Eleven
AT&T Mobility
Best Buy
BMW of Encinitas
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
Rosanos Unocal 76
Ross
Shell Gas & Car Wash
Target
TJ Maxx
Trader Joes
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 2016
2nd Quarter 2017
General
Consumer
Goods
Restaurants
and
Hotels
Autos
and
Transportation
County
and State
Pools
Fuel and
Service
Stations
Food
and
Drugs
Building
and
Construction
Business
and
Industry
$0 $0
$3,297,615 $3,113,888
(1,518) 949
398,676 401,387
$2,900,456 $2,711,551
2017-182016-17
Point-of-Sale
County Pool
State Pool
Gross Receipts
Less Triple Flip*
REVENUE COMPARISON
One Quarter – Fiscal Year To Date
*Reimbursed from county compensation fund
NOTESSales Tax UpdateQ2 2017 City of Encinitas
$0
$1,000
$2,000
$3,000
$4,000
SALES PER CAPITA
Encinitas
Q2
14
Q2
17
Q2
15
Q2
16
County California
27%
Cons.Goods
18%
Restaurants
13%
Autos/Trans.
12%
Pools
9%
Fuel
8%
Food/Drug
8%
Building5%
Bus./Ind.
Encinitas This QuarterREVENUE BY BUSINESS GROUP
Q2 '17*
Encinitas
ENCINITAS TOP 15 BUSINESS TYPES
Business Type Change Change Change
County HdL State*In thousands of dollars
16.7%15.5%-2.4% 58.4 Auto Lease — CONFIDENTIAL —
0.2%6.0%2.9% 189.3 Building Materials — CONFIDENTIAL —
0.3%2.1%0.7% 293.3 Casual Dining
11.7%5.2%6.3% 66.5 Convenience Stores/Liquor
4.1%3.2%2.6% 207.3 Discount Dept Stores — CONFIDENTIAL —
17.5%0.2%-3.4% 109.6 Electronics/Appliance Stores
9.9%4.0%5.0% 87.2 Family Apparel
48.3%9.3%5.9% 78.9 Fast-Casual Restaurants
8.1%2.1%1.3% 156.2 Grocery Stores
-19.3%0.4%1.8% 119.6 Home Furnishings
11.9%3.2%0.6% 260.5 New Motor Vehicle Dealers — CONFIDENTIAL —
7.8%5.8%6.2% 166.8 Quick-Service Restaurants
4.1%8.6%10.8% 314.0 Service Stations
3.9%0.9%1.6% 69.1 Specialty Stores
13.7%-15.1%-15.4% 139.0 Sporting Goods/Bike Stores
6.4%2.4%7.0%
-1.3%
5.9%
2,900.5
397.2
3,297.6
Total All Accounts
County & State Pool Allocation
Gross Receipts
-5.5%-9.9%
1.4%4.1%
California Overall
Local government’s one-cent share of
statewide sales and use tax from trans-
actions occurring April through June
was 3.2% higher than the same quarter
of 2016 after payment aberrations are
factored out.
The largest percentage increases were
from the countywide allocation pools,
building supplies and rising fuel prices.
Auto sales and restaurants continued to
post solid gains. Except for value priced
apparel and dollar stores, most categories
of general consumer goods were down or
flat with the growth in online shopping
shifting tax receipts to in-state distri-
bution centers or to the countywide
allocation pools.
Receipts from business and industrial
transactions were lower than last year’s
comparable quarter because of declines
in new alternative energy projects. Ag-
ricultural and new technology related
purchases exhibited healthy gains as
did sales of warehouse and construction
equipment. Most other categories were
down from 2016.
Where does the Money Go?
E-commerce, technology and changing
consumer preferences have retailers un-
dergoing a dizzying transformation as
they compete for customers through
online websites, mobile apps, home de-
livery, social media, pop-up/flex stores
and pick-up lockers as well as traditional
brick and mortar businesses.
The changes in how goods are invento-
ried, sold and delivered has created some
confusion in allocating local sales and
use tax. However, it still involves three
basic principles:
• Location where the sale is negotiated
• L oc at ion of good s at t ime of sa le
• Ownership of goods being sold
Place of sale continues to be Califor-
nia’s primary rule for allocating local
sales tax. If the inventory is owned by
the seller and is located in-state, the tax
goes to the location that participates in
the sale, either by receiving the order or
shipping the goods. If the order is taken
outside the state but the seller owns the
inventory and delivers the goods from
inside California, the tax is allocated to
the jurisdiction where the warehouse is
located. Otherwise, the tax is shared
by all agencies in the county where the
goods are shipped on a pro-rata basis
through the county allocation pools.
Ownership of the goods being sold is
also a factor. In order for an agency to
receive a direct allocation of local tax
for goods shipped from a California
fulfillment center, the location must be
the retailer’s place of business and not
owned or operated by a separate legal
entity. If the retailer has no place of busi-
ness in California, the only opportunity
for local tax is an indirect allocation
through the countywide pools
For jurisdictions with transactions tax
overrides, that tax goes to the place of
purchase rather than the place of the
seller. For example, the sales tax on the
purchase of an automobile goes to the
seller’s location. However, the transac-
tions tax, if any, goes to the jurisdiction
where the buyer’s vehicle is registered.