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Sales tax to increase after approval of Proposition 30

Local business owners say jump won’t have big effect

Posted: December 7, 2012 2:00 a.m.
Updated: December 7, 2012 2:00 a.m.

Statewide sales tax rates increase a quarter of a percentage point on Jan. 1, 2013, but some local retailers say they don’t expect it to have a big effect on shopper buying patterns.

While the increase will push the sales tax on items purchased from 7.25 percent to 7.50 percent in the state of California, it means the sales tax rate will jump to 9 percent in the Santa Clarita Valley because Los Angeles County also has a sales tax.

The rate increase is a result of California voters approving Proposition 30 in November to help fund schools for the next four years. It affects use tax, as well.

Proposition 30 also imposes income tax increases on those earning $250,000 or more annually.

The question is whether the sales tax increase will change the buying decisions of consumers. For every dollar they spend after Jan. 1, their sales tax will increase a quarter of a cent.

The impact will be most felt on high-ticket items.

“We’re not anticipating much change,” said Sara Rose, manager of the Guitar Center in Stevenson Ranch.

The music retailer does carry some higher-ticket items, she said. But on the whole, the tax increase shouldn’t affect sales much as most of the items it carries are in the “affordable” range.

Jason Kurzius, owner of WOLVES Surfshop on Newhall Ranch Road, said he doesn’t expect much effect either.

“I’ll have to pay the extra taxes but I’m not raising my prices (on the surfboards), so it shouldn’t affect my customers too much at all,” Kurzius said.

Robert Rizzo, general manager of Lexus of Valencia, says he doesn’t expect the increase to affect auto sales.

U.S. consumers bought 1.1 million cars and trucks in November, up 15 percent from a year earlier, according to The Associated Press. It was the fastest sales pace since January 2008.

Lexus sales were up 16.8 percent over November 2011, the auto manufacturer reported this week.

“Interest rates are so low,” Rizzo said. “It shouldn’t have any effect.”

The tax hike will not expire until Dec. 31, 2016.



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