At its January 17 meeting the City Council authorized City Manager Scott Huth to execute agreements with the State Board of Equalization for the BOE to set up and administer the Transactions and Use Tax, approved by the voters as Measure Q. This involves “developing procedures, programming for data processing, developing and adopting appropriate regulations, designing and printing forms,” and more. Costs of preparation should not exceed $175,000, according to the terms of the agreement, and will be submitted to the City by May 2017.
A transactions and use tax is collected in the same manner as a traditional sales tax with minor exceptions. Measure Q would authorize a one percent (1%) transactions and use tax which would increase the combined sales tax rate in Del Mar to nine percent (9%). Taxes collected pursuant to Measure Q would be deposited into the City’s general fund. They could be used for any purpose for which general fund revenues may be used, but the City Council has made clear they will not go for any routine expenses but only for the purposes enumerated in the Survey and the Impartial Analysis for Measure Q, undergrounding utilities, street improvements, park improvements, police, fire, senior programs and youth programs. A citizen oversight committee will work with the Finance Committee, and the City Council will gather input from the community to help prioritize use of the funds.
Retailers will collect the tax from customers at the time of a retail purchase and remit the funds to the State Board of Equalization, which administers the tax. Administrative costs will be deducted from the proceeds of the tax by the BOE. The tax will be paid by anyone, including residents of Del Mar, who purchases goods at retail establishments within Del Mar.
In addition, Del Mar residents will be required to pay the tax when they purchase an automobile, boat or aircraft anywhere in California and register it to an address in Del Mar. Measure Q is estimated to generate approximately $2 million of revenue annually. It will probably go into effect by April or May.