HdL Sales Tax Report for CY2023 Q4 Saleswww.hdlcompanies.com | 888.861.0220
Q4 2022*
Q4 2023*
Legend
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
SALES TAX BY MAJOR BUSINESS GROUP*Allocation aberrations have been adjusted to reflect sales activity
General
Consumer
Goods
Restaurants
and
Hotels
County
and State
Pools
Fuel and
Service
Stations
Food
and
Drugs
Autos
and
Transportation
Building
and
Construction
Business
and
Industry
TOP 25 PRODUCERSCITY OF ENCINITAS HIGHLIGHTS
Published by HdL Companies in Spring 2024
SALES TAX UPDATE
CITY OF ENCINITAS
4Q 2023 (OCTOBER - DECEMBER)
7 Eleven
76
Alila Marea Beach Resort Encinitas
Best Buy
Cardiff Seaside Market
Chevron
Dick’s Sporting Goods
Encinitas Ford
Hansen Surfboards
Herman Cook Volkswagen
Home Depot
Home Goods
Pacific Coast Grill
REI
Scotty Cameron Gallery
Sephora
Shell Car Wash & Detail
Target
TJ Maxx
Total Wine & More
Trader Joe’s
Valero
Vons
Vuori
Walmart Supercenter
During the period from October to
December, Encinitas experienced
a decrease in receipts by 8.8%
compared to the fourth sales period
of 2022. Excluding irregular reporting
instances, sales saw a more significant
decline of 12.4%.
The relocation of an auto-
transportation vendor to another
jurisdiction within the past year was
a major contributor to this downturn.
This loss had had the additional
compound negative effect of a
reduction in the City’s share of the
countywide use tax pool, as these
funds are distributed among local
agencies based on their proportional
cash receipts each quarter.
Furthermore, there was a decrease in
business-industrial receipts, reflecting
a nationwide trend of reduced
manufacturing and business activity
towards the end of the year as indicated
by tracking indices. Sales of sporting
goods, bikes, family apparel, home
furnishings, and other retail items
also declined, with consumers shifting
their discretionary spending away
from tangible goods towards leisure,
travel, services, entertainment, and
restaurant expenditures. Additionally,
food and drug sales decreased as
consumers redirected their spending
from alcohol purchases for home
consumption to dining out.
In comparison, taxable sales for all
of San Diego County decreased
by 1.2% in this same time period,
while the Southern California region
experienced a decline of 2.0%, net of
irregularities.
TOTAL:$ 4,063,028
-12.4%-1.2%-2.5%
COUNTY STATE
ENCINITAS
4Q2023
TOP NON-CONFIDENTIAL BUSINESS TYPES
Q4 '23*
EncinitasBusiness Type Change Change ChangeCountyHdL State
-4.9%-1.2%3.5% 372.1 Service Stations
1.8%1.1%0.6% 365.3 Casual Dining
0.4%2.1%-3.7% 184.6 Quick-Service Restaurants
-7.1%-7.0%-6.0% 176.5 Sporting Goods/Bike Stores
-4.6%-7.0%-4.3% 168.9 Grocery Stores
-2.1%2.2%3.1% 137.5 Specialty Stores
-0.4%0.5%-13.8% 125.9 Family Apparel
1.6%3.1%0.4% 123.6 Fast-Casual Restaurants
-7.7%-10.2%-8.6% 121.1 Convenience Stores/Liquor
-10.1%-10.1%-7.0% 109.9 Home Furnishings
*Allocation aberrations have been adjusted to reflect sales activity *In thousands of dollars
REVENUE BY BUSINESS GROUP
Encinitas This Calendar Year*
18%
Pools
19%
Restaurants
10%
Autos/Trans.
7%
Building
4%
Bus./Ind.
24%
Cons.Goods
8%
Food/Drug
9%
Fuel
*ADJUSTED FORECONOMIC DATA
SALES TAX UPDATECITY OF ENCINITAS4Q 2023
STATEWIDE RESULTS
California’s local one cent sales and
use tax receipts during the months of
October through December were 2.5%
lower than the same quarter one year ago
after adjusting for accounting anomalies.
The fourth quarter is notably the highest
sales tax generating quarter of the year
and exhibited diminished year-over-year
returns as consumers balanced higher
prices and financing costs with essential
household needs.
Higher interest rates impacted the auto-
transportation sector, especially luxury
vehicles, as the group dropped 6.2%.
Inventories for many dealers returned,
creating downward pressure on prices,
further constraining receipts. Lenders have
tightened credit standards, making loan
financing challenging. Improved leasing
activity was the lone bright spot. With
slow movement expected by the Federal
Treasury setting interest rate policy, future
revenue growth may stagnate.
Fuel and service stations contributed a
similar downturn, as lower fuel prices
reduced receipts from gas stations and
petroleum providers. While this has
been the trend throughout 2023, recently
global crude oil prices have been on the
rise and should see growth in the coming
year. This decline also impacted the
general consumer goods category as those
retailers selling fuel experienced a similar
drop.
During this holiday shopping period,
general consumer goods experienced
lackluster sales as results pulled back 3.4%.
Most sectors saw reductions with home
furnishings, women’s apparel, shoe and
electronic-appliance stores being the most
significant. Returns also marked the fourth
consecutive quarter showing comparable
declines. Similar to the anticipated trend
of new vehicles, consumer spending may
be sluggish in the near term.
Even though revenue from most major
sectors slowed, restaurant sales remained
steady with a modest gain of 1.0%. Results
from casual dining establishments grew
during the early winter period as patrons
enjoyed indoor dining. However, following
the greater trend of consumers looking
for value, fine dining eateries experienced
lower receipts. The industry is still bracing
for implementation of AB 1228, a new law
increasing minimum wages for ‘fast food
restaurants’, on April 1, 2024.
Use taxes remitted via the countywide
pools grew 1.0%, marking the first positive
rebound after four consecutive quarters of
decline. While overall online sales volume
is steady, pool collections contracted
with more taxes allocated directly to local
agencies via in-state fulfillment and through
existing retail outlets.
Statewide, calendar year 2023 ended with a
2.3% decline from 2022. Elevated inflation
and interest rates led to higher cost of
goods resulting in consumers not spending
as much as they had prior. Following
multiple years of post-pandemic tax growth
assisted by federal tax policy and temporary
workplace accommodations, consumers
reassessed their economic conditions
and limited purchases. As the Federal
Reserve considers delaying softening rates,
consumer spending could likely stagnate
delaying a return to the normal historical
growth trend in 2024.