City Council Agenda
Memo to:
Manteca City Council
From:
Matthew Boring, Interim Finance Director
Date:
September 16, 2025
Subject:
Support for Cal Cities City Managers Sales Tax Working Group's Proposed Recommendations to Change the Allocation of the Bradley-Burns 1% Sales Tax on E-Commerce Transactions
Recommendation:
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Staff recommends that the City Council provide direction on supporting the City Managers Sales Tax Working Group's proposed recommendations to change the allocation of the Bradley-Burns 1% sales tax on e-commerce transactions, and to direct staff to communicate this support to Cal Cities and relevant legislative bodies.
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Background:
The Bradley-Burns Uniform Local Sales and Use Tax Law (Revenue and Taxation Code ?? 7200 et seq.) allows California cities and counties to receive 1% of the statewide sales and use tax collected on taxable retail sales. Traditionally, this tax has been allocated on a "situs-based" model, meaning the revenue is distributed to the jurisdiction where the sale is deemed to occur - typically where the physical store or warehouse is located.
With the rapid rise in e-commerce, especially post-pandemic, this situs-based model has created significant inequities among local jurisdictions. Sales tax from online purchases is often allocated to large distribution centers, which are disproportionately located in a few cities, rather than to the local jurisdictions where the buyers reside and receive the goods.
This has resulted in:
* Disproportionate concentration of local sales tax revenue in a limited number of jurisdictions.
* Reduced funding capacity for general services in communities without major fulfillment centers.
* Erosion of fiscal sustainability for cities like Manteca that are seeing increased population and service demands but not a proportional share of online sales tax revenue.
In response to these issues, the Cal Cities City Managers Sales Tax Working Group has studied the impacts of e-com...
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