Thursday Oct 04 2012
Auburn officials want their slice of food truck sales tax
By: Jon Schultz, Journal Staff Writer
Mayor says more food trucks in Placer County is beneficial
When it comes to sales tax generated by food trucks, Auburn officials just want to ensure they’re getting their slice of the pie. Taxation has been the center of much discussion in the city’s evaluation of new food-truck regulations, and what some members of City Council initially thought might be an argument against the mobile vendors has turned into a possible positive outcome of encouraging their operation. “There’s been talk about food trucks not paying sales tax that comes into the city of Auburn,” Mayor Kevin Hanley said. “That is not true, as we learned (at the Sept. 24 City Council meeting).” A provision ensuring food-truck owners properly report sales tax is one of seven amendments to be made in an alternate to an ordinance proposed by the planning commission. Both sets of the mobile food vendor regulations for private property, along with a public right-of-way ordinance, will be in front of the Council at its Oct. 22 meeting. Sales tax from food-truck transactions goes into a county pool for businesses without a specific point-of-sale, and those taxes get distributed among the county’s jurisdictions on a pro rata basis. That means whatever percent Auburn generates of Placer County’s total sales tax is the same percent it will receive from the pool, said Andy Heath, administrative services director for Auburn. “Numbers are good and we would actually benefit from more mobile food vendors in Placer County. My main concern is a mobile food vendor would not attribute all sales tax earned in the city of Auburn,” if the owner also has a brick-and-mortar restaurant in another city, Hanley said. “So if they had a restaurant in the city of Loomis … (and) all sales tax money is attributed to the city of Loomis, the city of Auburn would lose out.” At about 8 percent, the Auburn’s allotment of the county sales tax pool falls in the middle of the pack, behind Roseville (58 percent), unincorporated areas (17 percent) and Rocklin (11 percent) but ahead of Lincoln (4 percent), Loomis (1 percent) and Colfax (1 percent). In other words, Auburn received about 8 cents of every dollar spent on food trucks reported to the county pool. In this year’s second quarter, Auburn received $97,456 from the pool, and although that pales in comparison to Roseville’s $731,724, Auburn is the only jurisdiction to have its share increase over that same period last year. It took in $4,619 more, while other cities’ allotment declined anywhere from $295 (Colfax) to $116,389 (Roseville). That’s because although the pool as a whole generated about 15 percent less sales tax that quarter, Auburn’s economy experienced significantly more growth than the rest of the county. Auburn generated 32 percent more sales tax revenue than the same quarter last year, whereas two jurisdictions saw a decline, three others grew by single-digit percentages and only Colfax at 22.6 percent came close to Auburn’s increase. The city’s sales tax revenue has experienced double-digit growth in all but three quarters since 2010. “We know that 80 percent of our businesses are now growing,” said Bob Richardson, Auburn city manager. “We have a few strong sales tax producers, but we also are seeing across-the-board improvement in businesses in almost all categories. “(Auburn) has experienced excellent economic growth with the exception, of course, of the recession. So, the numbers we’re seeing today aren’t entirely unique.” Food trucks are a mere drop of water compared to what is filling up the county’s backyard pool. According to environmental health permits, only 15 food trucks are operating in Placer County and feeding a pool featuring about 6,500 total entities, said Graham Knaus, finance and budget operations manager for the county. “Certainly 15 is a relatively small number, but they are an active player related to our economic activity overall,” Knaus said. “From our perspective, all sales and use tax that is collected is a part of a whole that is used to provide important services to the public.” Private party sales of high-ticket items such as cars, boats, recreational vehicles and mobile homes contribute a large portion of the pooled sales tax, he said, and other entities include vending machine operators and out-of-state online retailers. When a truck sells food in multiple counties, it is up to the owner to accurately report to the Board of Equalization where it operated, Knaus said. In the case of a mobile-food festival, such as Roseville’s that features out-of-county trucks, that event constitutes a specific point-of-sale and therefore sales tax would go to the jurisdiction in which it is located, he said. Community Development Director Will Wong said the language is still being drafted for the new version of the rules, dubbed “Alternate A,” which also would continue allowing food trucks in Downtown Auburn. The original proposal banned them from both Downtown and Old Town. Currently, they are allowed to park in a private lot for 30 minutes at a time in both historic districts. The new versions of the ordinance increase that time limit to two hours per location. Maria’s Mexican Tacos, a brick-and-mortar restaurant in Bowman, is the only food truck operating in Auburn and it has been known to frequent Downtown. Jon Schultz can be reached at email@example.com.