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Proposed Add on Sales and Use Tax Measure for Municipal Services for Public <br />Consideration on the November 2018 Ballot <br />July 3, 2018 <br />Page 3 <br />Staff met with members of the City Council to provide additional information on the proposed <br />Neighborhood Safety and Essential City Services Protection Measure. This included information <br />regarding the need for additional new on-going revenues, projected revenues based on a variety of <br />add on sales and use tax increments, community needs and priorities, and the results of the poll <br />conducted by FM3. The briefings provided an opportunity to present Staffs recommendation for the <br />Santa Ana Neighborhood Safety and Essential City Services Protection Measure to be placed on <br />the November 2018 ballot, which would generate the requisite funds to maintain and enhance <br />programs and services to the community. <br />What is Sales and Use Tax? <br />Sales tax is imposed on retail transactions for tangible personal property. The Use tax is imposed <br />on consumers of tangible personal property that is used, consumed, or stored. Sales tax is not <br />applicable to several general categories including: <br />1) Necessities of life (food products, unless heated, health related, housing), <br />2) General public benefit (alternate energy, museums, public art exhibits), <br />3) Industry benefit (transportation related such as motor vehicle fuel, entertainment industry); <br />4) Exclusions by definition (admission charges, sales price/gross receipts); and <br />5) Other exemptions, exclusions or credits (full list of exemptions is available al <br />https://www.cdtfa.ca.gov/formspubs/pub6l.pd . <br />A general-purpose tax measure requires approval from the majority of the voters (50% plus 1) to <br />implement such a tax. The sales and use tax is a common method used by various cities to <br />generate additional revenue for city programs and services. <br />Orange County Cities with an Add On Sales and Use Tax <br />In 2016, voters in five other Orange County cities approved or reaffirmed six add on sales and use <br />tax measures. The following cities currently have an add on sales and use tax in Orange County: <br />City <br />Increment <br />Sales & Use <br />Tax Rate <br />Fountain Valley <br />1.0% <br />8.75% <br />Westminster <br />1.0% <br />8.75% <br />Stanton <br />1.0% <br />8.75% <br />La Palma <br />1.0% <br />8.75% <br />La Habra <br />0.5% <br />8.25% <br />Additionally, there are several other cities in Orange County that are currently evaluating sales and <br />use tax ballot measures for this upcoming November 2018 election cycle. <br />55C-3 <br />