Three more cents per fancy mocha, about a buck on a nice dinner out and $190 on a new Ford Fusion. That April Fool’s Day sales tax hike, from 7.75 percent to 9 percent, was no joke.
The state’s 1 percent sales tax increase – you’ve been paying it since Wednesday – will be in effect until either July 1, 2011 or July 1, 2012, depending on whether voters approve the Proposition 1A Budget Stabilization Act in the May 19 statewide election. A separate 0.25 percent increase, approved by County voters last November to fund Sonoma Marin Area Rail Transit, is permanent.
Thus Tuesday’s $100 brake job is now $101.25.
“It’s not a deal-breaker,” said Chuck Holder, owner of Holder Ford. “We didn’t see a rush to beat the tax.” The overall economy is the primary concern, he said, but if someone needs to buy a car, the extra fee, particularly when spread over monthly payments, “is not the end of the world.”
Wendy Peterson, president of the Sonoma Valley Visitors Bureau, agrees, adding that the increase has not been a big topic of concern among members. “I don’t think people check the sales tax before they visit,” she said. “Do you call a restaurant and ask what the tax is?”
The tax increase is, for Economic Development Manager Laurie Decker, “a necessary evil.” Solving California’s budget woes is the first step in getting the economy moving forward. “A state budget in chaos did not do much for consumer confidence,” she said.
Even a minimal tax hike will hurt wine-related business, according to Grant Raeside, executive director of the Sonoma Valley Vintners & Growers Alliance, said. “Selling grapes, selling cases, buying a glass of wine in a restaurant – it effects everybody.” It especially hurts restaurants, where business is down, he said, particularly with groups and wine sales by the bottle. “This is the exact opposite of stimulus.”
Tax or no tax?
The new local 9 percent sales tax is one of the highest rates in the country. See which of your pennies is getting pinched:
Hot cup of coffee YES / Coffee beans NO
Cooked chicken YES / Frozen chicken NO
Can of soda YES / Bottled water NO
Candy at the movies YES / Candy at the store NO
Over-the-counter meds YES / Prescription drugs NO
Meal on an airplane YES / Meal at school NO
Car sold to friend YES / Car sold to family NO
Pet fish food YES / Cow feed NO
New sales taxes push total to 9 percent
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