HdL Sales Tax Report for CY2023 Q1 Saleswww.hdlcompanies.com | 888.861.0220
Q1 2022*
Q1 2023*
Legend
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
SALES TAX BY MAJOR BUSINESS GROUP*Allocation aberrations have been adjusted to reflect sales activity
General
Consumer
Goods
County
and State
Pools
Restaurants
and
Hotels
Autos
and
Transportation
Fuel and
Service
Stations
Food
and
Drugs
Building
and
Construction
Business
and
Industry
TOP 25 PRODUCERSCITY OF ENCINITAS HIGHLIGHTS
Published by HdL Companies in Summer 2023
SALES TAX UPDATE
CITY OF ENCINITAS
1Q 2023 (JANUARY - MARCH)
7 Eleven
76
Alila Marea Beach Resort Encinitas
Best Buy
BMW of Encinitas
Chevron
Dick’s Sporting Goods
Encinitas Ford
Financial Services Vehicle Trust
Hansen Surfboards
Herman Cook Volkswagen
Home Depot
Home Goods
IFE Marketing
Pacific Coast Grill
REI
Scotty Cameron Gallery
Shell Car Wash at Encinitas Ranch
Target
TJ Maxx
Total Wine & More
Valero
Vons
Vuori
Walmart Supercenter
Encinitas’ receipts from January
through March were 3.1% below the
first sales period in 2022. Excluding
reporting aberrations, actual sales were
down 2.8%.
The largest factor in this decline was the
recent closure of an auto-transportation
vendor during the reporting period.
Tax receipts from fuel and service
stations were also lower as the price
of gasoline fell amid worry that the
economy may weaken later this year.
The City’s income was further impacted
by a reduced share of the countywide
use-tax pool. The pool allocates funds
to local jurisdictions based on their
proportional cash receipts. In the
case of Encinitas, these receipts were
relatively lower due, in large part, to the
previously mentioned closure of the
auto-transportation business.
However, amidst these challenges,
there were also positive developments.
These included the recent opening
of several new businesses that had a
particularly beneficial impact on the
casual dining and convenience and
liquor store categories.
Net of aberrations, taxable sales for
all of San Diego County grew 1.7%
over the comparable time period; the
Southern California region was down
0.9%.
TOTAL:$ 3,967,848
-2.8% 1.7%-1.1%
COUNTY STATE
ENCINITAS
1Q2023
TOP NON-CONFIDENTIAL BUSINESS TYPES
Q1 '23*
EncinitasBusiness Type Change Change ChangeCountyHdL State
9.6%10.7%9.2% 356.2 Casual Dining
-9.8%-11.0%-12.8% 335.6 Service Stations
5.1%6.2%-3.5% 166.2 Quick-Service Restaurants
-8.1%-6.6%2.6% 154.4 Sporting Goods/Bike Stores
5.4%5.8%-2.3% 153.1 Grocery Stores
-10.3%-6.0%-10.2% 108.7 Home Furnishings
6.4%8.3%-0.4% 106.4 Fast-Casual Restaurants
2.3%4.5%6.3% 106.1 Family Apparel
-5.0%-0.6%43.3% 104.9 Convenience Stores/Liquor
3.7%3.8%15.3% 99.4 Specialty Stores
*Allocation aberrations have been adjusted to reflect sales activity *In thousands of dollars
REVENUE BY BUSINESS GROUP
Encinitas This Quarter*
18%
Pools
18%
Restaurants
15%
Autos/Trans.
7%
Building
4%
Bus./Ind.
22%
Cons.Goods
8%
Food/Drug
9%
Fuel
*ADJUSTED FORECONOMIC DATA
SALES TAX UPDATECITY OF ENCINITAS1Q 2023
STATEWIDE RESULTS
California’s local one cent sales and use
tax receipts for sales during the months
of January through March were 1.1%
lower than the same quarter one year ago
after adjusting for accounting anomalies.
The first quarter of the calendar year
experienced heavy rainfall and a slight
pullback by consumers during this post-
holiday period.
The building and construction sector
was most impacted by wet weather
conditions, especially contractors and
paint/glass vendors. Furthermore, when
coupled with year-over-year (YOY)
lumber price declines, the sector saw a
9.7% statewide drop.
YOY declines in fuel prices at the pump
reduced receipts from gas stations and
petroleum providers. Even with OPEC’s
recent production cuts, the global cost of
crude oil has remained steady setting up
for moderate gas prices for travelers and
commuters in the coming summer months.
Retailers also selling fuel experienced a
similar impact and when combined with
weak results from department stores,
overall general consumer goods’ returns
slightly declined.
After multiple years of high demand
for vehicles (especially high-end luxury
and electronic/hybrid brands), along
with inflation driving car prices higher,
customers demand has softened with
revenue slumping 1.3%. The return of
available inventory later this calendar
year may sustain downward pressure on
activity, potentially giving buyers more
leverage to negotiate lower prices.
Use taxes remitted via the countywide
pools decreased 1.1%, marking the
second consecutive quarter of decline.
Cooling consumer confidence, expansion
of more in-state fulfillment centers and
retailers using existing locations to deliver
goods tied to online orders continue to
shift taxes away from the pools. While the
offsetting effect was these revenues being
allocated directly to jurisdictions where
the goods were sourced, only a limited
number of agencies benefited.
Spending at local restaurants and hotels
continues to be robust. Patrons were
unaffected by increased menu prices and
wait times and maintained their willingness
to dine out. In addition, investments in
warehouse/farm/construction equipment
was steady.
For the remainder of 2023 sales taxes may
decrease modestly, then begin a nominal
recovery in early 2024. Volatile economic
indicators such as the Federal Funds rate,
unemployment levels, and discretionary
spending will influence outcomes. While it
appears the Federal Reserve’s actions to
fight inflation is taking effect, any lasting
downward pressure on consumer pricing
could also hinder short term growth.