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How Pacifica’s proposed 1¢ transaction‑and‑use tax would work and who pays
Summary
Staff told the council the proposed local transaction‑and‑use tax (TUT) would add 1¢ to Pacifica’s combined sales tax rate (from 9.875% to 10.875%), be collected and administered by CDTFA, and would apply mainly to delivered goods and certain transactions not well captured by the standard Bradley‑Burns sales tax; staff estimate roughly $5M per year in revenue if voters approve.
Pacifica staff spent part of their presentation explaining what a local transaction‑and‑use tax covers and how it differs from the regular Bradley‑Burns sales tax.
Key points staff made: - A local TUT is applied to the place of delivery or use, so it captures more e‑commerce, delivered appliances and furniture, some construction materials, and vehicle registrations that the place‑of‑sale Bradley‑Burns tax misses. Assistant City Manager Julia Cardo said the city’s Bradley‑Burns 1% currently generates roughly $3.1 million in general‑fund revenue; staff estimate the proposed 1¢ TUT could add about $5 million annually. - The combined sales tax rate in Pacifica is currently about 9.875%. If the measure passes and is implemented per state rules, the rate would increase by 1¢ to about 10.875%. - The state agency (CDTFA) collects and allocates sales and transaction taxes. "The city does not track the transactions. The allocation happens by the state," Cardo said; Pacifica contracts with an auditor (HDL) to periodically audit allocations to ensure correct distribution. - The city cannot unilaterally decide state exemptions; state law defines categories that are exempt (groceries, prescription medication, many services including medical and legal services and most residential real‑estate transfers, among others).
Staff used examples to clarify: a car purchased outside Pacifica may still generate Pacifica TUT if registered in Pacifica; online deliveries to a Pacifica address would be taxed to Pacifica under the TUT. Staff also emphasized that the city would deposit proceeds to the general fund subject to independent annual audits and council appropriation.
