Tuesday, October 19, 2010
SAN DIEGO Voters in San Diego will soon decide whether to raise the city’s sales tax. As the election draws near, KPBS looks at how the tax is applied.
If voters approved the tax hike, San Diego’s sales tax would go from 8.75 percente to 9.25 percent for a five year period. The increase would generate more than $100 million a year for the city.
Kathryn Jaques, an instructor at San Diego State University, specializing in state and local tax, said sales tax has historically been applied to tangible, personal property, such as clothes, or books. She said people pay a lot more in sales tax each year than they might think, but would still choose it over other taxes," she explained.
“If you ask taxpayers, 'would you rather pay a higher sales tax or a higher income tax' for example, everybody will vote for a higher sales tax because you’re not aware of the sales tax,” she said.
Jaques said it can get confusing when it comes to food. For instance, she said a rotisserie chicken sold hot is taxed. But if the chicken is refrigerated and sold cold, it’s not taxed.
Historically, sales tax hasn’t been applied to services like dry cleaning. But Jaques said that’s changing as more of the economy depends on people providing services to each other and less on people buying tangible items.