Pass: 2,475 / 67.64% Yes votes ...... 1,184 / 32.36% No votes

See Also: Index of all Measures

Impartial Analysis from EDUARDO OLIVO, City Attorney

Measure AA proposes to raise revenue to offset severe state budget cuts and provide funding for such things as police and fire services, repair, maintenance and improvement of streets, sidewalks, public facilities, parks, libraries and other services in the City of Commerce. This list is illustrative and non-exclusive, because this Measure is classified as a "general tax," not a "special tax," and may be used for any valid municipal purpose. The revenue would be raised by approving an ordinance enacting a one-half of one percent (1/2%) transactions and use (i.e. "sales tax") tax within the City. This tax on retail sales is paid by non-residents as well as residents. If adopted, it will not go into effect until April 1, 2013.

California Revenue and Taxation Code §7285.9 authorizes the City to levy or increase a transactions and use (sales tax) tax for general purposes, if the ordinance proposing the tax is approved by simple majority of the qualified voters voting in the election. If approved, the tax would add a half-cent to the price of an item that costs a dollar. Currently, the tax on retail sales that take place in the City is 8.75% of the purchase price. The City of Commerce receives only 1%. The remainder goes to the State (6.25%) and County of Los Angeles (1.50%). The Measure would authorize a local 1/2% transaction and use tax, increasing the total sales tax rate to 9.25%. This tax revenue generated as a result of the Measure would be deposited in the City's general fund and would stay in the City to support the full range of municipal services.

The proposed ordinance requires an annual audit by an independent auditor. An oversight committee made up of City residents and business representatives will also monitor and report on the expenditure of the tax revenues and make recommendations to the City COlincil for use of the these revenues. The committee's report and recommendations shall be a matter of public record and considered by the City Council at a public meeting.

Technically, the existing "sales tax" is a combination of "sales and use tax" and "transactions and use tax." Retailers collect both taxes at the time of sale and remit the funds to the State Board of Equalization, which administers the taxes. Both are levied on the retail sale or use of personal property, with certain exceptions. A sales tax is allocated to the jurisdiction where the sale is negotiated or the order for the sale is taken, but a transactions and use tax is allocated to the City where the goods are delivered or placed into use. Merchandise purchased in a "walk-in" retail store is assumed by the state to be used within the City in which the store is located, unless the retailer is asked to ship the merchandise outside the City as part of the sale or it is a motor vehicle that can be driven away.

This Measure will be approved if it receives a simple majority of "Yes" votes.