Budget in Brief
Sales Taxes
The City collects sales tax from three sources: normal Bradley-Burns sales taxes (1 percent of taxable transactions), a ½ percent sales and use tax, commonly referred to as Measure P and devoted entirely to the City, and another ½ percent sales tax, referred to as Measure Y. All three tax sources are distinct and considered separate sources. Each behave slightly differently given their tax base.
Bradley-Burns sales taxes are referred to as “sales and use” taxes, levied on transactions based geographically in the City.
Measures P and Y. These are what are called “transaction and use” taxes and are applied to any taxable sale in the City as well as any sale where the use of the item is in the City. For instance, a car purchased outside the City but registered to, and therefore presumed to be used at, an address within the City would be levied the ½ cent on the purchase price. Taxes collected under Measures P and Y are general taxes available for any purpose the City Council determines appropriate and desirable for the interest of the community; however, the use of resources collected by Measures P and Y have been appropriated by Council exclusively for public safety and streets/rights-of-way maintenance and improvements respectively.
The City is not the only entity that collects sales tax on transactions conducted in the City. Here we see where else sales taxes go.
Sales taxes over the last decade have steadily increased, further bolstered by the effects of the new Costco in Ukiah. Sales taxes are expected to continue increasing over the next several years with the exception of 2022 where the City is forecasting the effects of a national recession.