Independent Staff Report
WEST HOLLYWOOD — The city is reminding local shoppers and businesses that a sales tax rate change takes effect April 1. The city’s sales tax rate will increase from 9.5% to 10.25%.
West Hollywood voters approved Measure E In the November 2020 municipal election to approve the sales tax hike to address a revenue shortfall and longer-term impacts to the economy from COVID-19. The additional tax will keep collected tax dollars local to support local needs. Businesses are being reminded to update point-of-sale systems accordingly.
The city is projecting a loss of as much as $35 million over the 2020 and 2021 fiscal years, equal to approximately a 20% decline in revenue. The new tax rate is expected to generate approximately $11 million annually.
Measure E funds will help prevent cuts to programs and services that are critical to residents and could otherwise help the city recover from the current crisis, such as protecting public health, working with local nonprofits to help community members in need and helping local businesses survive.
The maximum sales tax rate in Los Angeles County is 10.25%. The city receives 1% of all transactions involving sales tax within the city. The other 9.25% is allocated to other taxing entities including the state and Los Angeles County.
As the city continues to respond to the revenue shortfall created by the COVID-19 pandemic, Measure E will help the city maintain services that residents have indicated are important, including addressing homelessness, expanding health and mental health services, retaining local businesses and jobs, keeping public areas clean and safe, maintaining HIV and AIDS health services and supporting disaster preparedness.
Additional information about Measure E is available on the city’s website, including links to frequently asked questions and a community presentation.
For more information, contact city Revenue Manager Annie Ruiz at (323) 848-6499.