Consultant explains Bradley-Burns, Measure O, and online-pool mechanics behind Davis sales tax

Susie Woodstock of HCL walked commissioners through how statewide sales tax is structured, how the local 1% (Bradley-Burns) is allocated, and how the city’s 1% Measure O (a voter-approved transaction and use tax) differs in distribution and scope.

Woodstock explained that the Bradley-Burns 1% is largely a point-of-sale allocation: “If a transaction occurs in the city, you get the 1% of that transaction,” she said. She described the indirect countywide pool for out-of-state-origin purchases (use tax) and said Davis’ county-pool share is determined by the city’s brick-and-mortar receipts relative to other county jurisdictions.

Why it matters: the mix of local businesses — autos/transportation, restaurants, general consumer goods and the portion of online sales shipped into or fulfilled within California — materially affects the city’s sales-tax receipts. Woodstock showed that Davis’ Bradley-Burns composition is weighted toward autos/transportation and restaurants, and that roughly 19% of the city’s Bradley-Burns receipts in the sample quarter came from the countywide pool.

Measure O differences: Woodstock explained Measure O (transaction/use tax) is destination-based and applies to deliveries into the city regardless of origin, and therefore captures more online shipments delivered to Davis addresses than Bradley-Burns. She also noted that auto measures under Measure O are tied to vehicle registration to a Davis address rather than where the purchase occurred.

Policy and outlook: Woodstock flagged several statewide drivers — legislative changes requiring out-of-state vendors to collect tax (Wayfair-era implementation), AB-era reporting changes around tax-sharing agreements, and minimum-wage legislation for large fast-food chains — that have had or could have local sales impacts. She provided a per-capita sales comparison showing Davis below several peer cities and discussed what types of businesses (regional destination retailers, fulfillment/order desks, auto dealerships) typically raise per-capita sales tax receipts.

Follow-up: Woodstock offered to provide the commission with standard per-capita and projection reports; commissioners asked for the presentation materials and a county report on allocations.