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September 5, 2016

How to Correctly Calculate the California Sales Tax Rate Using Geo-Based Technology

Most online tools do not calculate California sales tax correctly

California sales tax is complicated. To correctly calculate the sales tax rate, let’s first understand its requirements.

According to California Board of Equalization Publication 44 “District Taxes” (Sales and Use Tax), most businesses in California are located – or do business in – special sales and use tax districts.

What is a district?

A “district” is a local jurisdiction that, under enabling statutes in various codes, may impose transactions (sales) and use taxes within its borders. Voter approved district taxes may be levied on a countywide basis and within incorporated city limits. A city district tax rate applies only to addresses within the incorporated city limits. Additionally, more than one district tax may be in effect in a given location.

What are district taxes?

District taxes are either transactions (sales) or use taxes. The Revenue and Taxation Code provides that transactions (sales) taxes are due from retailers on their sales of tangible personal property, and use taxes are due from purchasers for their use of tangible personal property in the district. “Use” is defined as the use, storage, or other consumption of tangible personal property.

So, in order to correctly calculate California sales tax, you need to know:

  1. County and city district sales tax rates
  2. If the address is within the incorporated city limits

The information for county and city district sales tax rates are easy to find. California Board of Equalization publishes the county and city tax sales and use tax rates on http://www.boe.ca.gov/app/rates.aspx. You can locate the rates by county and/or by city.

The challenge is to figure out if the address is within the incorporated city limits. Some people think they can identify the incorporated city by the name of the city included in the address. Unfortunately most addresses are mailing address by US Postal Office.

The name of the city in the mailing address can be the mailing city,  in other words, the city in which the postal office delivering to the address is located. This mailing city may be different from the physical city that the address is located in. So we can’t use it to correctly determine its physical city, let alone if it’s within the incorporated city limits.

The complexities of zip codes

Some people wonder if zip codes can determine the incorporated city limit. In fact, a lot of shopping cart service providers and softwares use zip codes to match the sales tax rates. Unfortunately many zip codes breach city boundaries, making them an unsuitable method as well.

How can you correctly calculate California sales tax?

The only solution to accurately calculate California sales tax is through a geo-based technology to find out its municipality. Municipality is a city or town that has corporate status and local government. If the address has a municipality, it means it’s within an incorporated city. It the address does not have a municipality, it’s outside of an incorporated city and it is only part of a county.

Let’s look at the city of Campbell in Santa Clara county, California.

Here is the breakdown of the county and city district sales and use taxes as of 9/5/2016. On top of the state tax of 7.5%, the total county district tax is 1.25%, and the total city district tax is 0.25%.

County district tax:

  • Santa Clara County Transit District (SCCT): 0.500%
  • Santa Clara County Valley Transportation Authority (SCVT): 0.500%
  • Santa Clara VTA BART Operating and Maintenance Transactions and Use Tax (SVTB): 0.125%
  • Santa Clara County Retail Transactions and Use Tax (SCCR): 0.125%
  • Total county district tax: 1.250%

City district tax:

  • City of Campbell Vital City Services, Maintenance and Protection Transactions and Use Tax (CMPL): 0.250%
  • Total city district tax: 0.250%

Now let’s look at the following 2 addresses:

Address 1: 1 W Campbell Ave, Campbell, CA 95008.

Address 2: 1130 Normandy Dr, Campbell, CA 95008

The map below shows the locations of these 2 addresses produced by USgeocoder. The areas highlighted in light gray are incorporated areas that are within the incorporated city of Campbell. Their municipality is Campbell. The areas highlighted in yellow are un-incorporated areas that are surrounded by the incorporated city of Campbell.

California_sales_tax

The address “1 W Campbell Ave” is located within the city limit of the incorporated city of Campbell. Its total California sales tax rate is 9% (7.5%+ 1.25% + 0.25%).

However, the address “1130 Normandy Dr.” is located in an un-incorporated area surrounded by the city of Campbell. So the city district tax does not apply. Its total California sales tax rate is 8.75% (7.5%+ 1.25%).

Harness the power of our GIS technology to determine municipality and sales tax rate

To find municipality for any U.S. address, you can use the free lookup at USgecoder.com. Just enter an address and its zip code, press the “Free Lookup” button and you will find the municipality for the input address. If it’s within an incorporated city limit, it will show the name of the city. If it’s not within an incorporated city limit, it will say “Un-incorporated Area”.

To find the sales tax rate for a specific address in California, you can do the same with our free address-based location lookup tool. It will show the total tax rate with the breakdown and details information of county and city district tax rate. If the address is in an unincorporated area, it will say “N/A – Unincorporated Area 0%” for the city district tax.

Here is the screenshot of the search result for 1130 Normandy Dr, Campbell, CA 90058, an address that is not within a city limit.

California_sales_tax


Interested in learning more about the district matching and location lookup service entrusted by organizations including FedEx, Coca-Cola Bottling Company, the Smithsonian and the National Multifamily Housing Council? Discover better accuracy and complete data privacy protection today!

August 20, 2016

How to Determine PACE Program Eligibility through GIS Technology

As a PACE program provider, you must know a property’s municipality

The PACE program (or Property Assessed Clean Energy) is a simple and effective way to finance energy efficiency, renewable energy, and water conservation upgrades to buildings.

PACE programs allow local and state governments, as well as other inter-jurisdictional authorities, to fund all up-front costs of energy improvements on both commercial and residential properties, which are then paid back over time by the property owner.

PACE programs can pay for new heating and cooling systems, lighting improvements, solar panels, water pumps, insulation, and more.

Challenges for PACE Program Providers

PACE program providers work closely with local governments to offer their programs. Municipalities and county governments can opt-in or opt-out of the program. In order to find out if a particular house qualifies for the PACE program, the provider needs to know if the home owner lives within the boundary that offers a PACE program.

If the address is within the incorporated city, its municipality is the incorporated city. If not, the municipality of the address is in an unincorporated area surrounded by the incorporated city.

The problem is, most home owners provide standardized mailing addresses, which may not reflect the municipality of the address. To find the true municipality of an address, programs such as PACE rely on a service that’s far more accurate and precise.

 

Learn more about how to find the proper municipality by address

 

Determining the municipality of an address

Assuming the city of San Jose in Santa Clara County, CA opts in to the PACE program, and Santa Clara County does not opt in to the program, let’s see how it affects the following 2 addresses:

Mailing Address 1:
1591 Williamsport Drive, San Jose, CA 95131

The municipality of this address is San Jose. It’s eligible for the PACE program.


Mailing Address 2:
2221 Enborg lane, San Jose, CA 95128

Although the mailing city for this address is San Jose, the physical address is actually not within the incorporated city of San Jose.  The municipality of the address is in an unincorporated area within the county. Because Santa Clara county does not opt in, it is NOT eligible for the PACE program.


How to Find the Municipality by Address?

As the repository of municipality information, the US Census provides boundaries for each municipality in the US.

The only way to determine the municipality is to use a geolocation service. Such a service maps the physical location of the home and then queries the municipality database provided by US Census.

As one of the few OEM geo-coders in the US, USgeocoder provides geolocation-based municipality lookup by address. We geocode each address, identify its latitude and longitude, match it to the US Census database and then produce municipality information for the input address.

This level of accuracy and pinpoint precision has proven to be an invaluable asset to program providers such as PACE, that rely on proper data.

Interested to see our address-based location lookup service at work?

 

We encourage you to try our live demo

Simply enter any address in the U.S., click on the “Free Lookup” button and nearly instantly you’ll be provided with vital, and accurate, information, including:

  • Standardized address
  • Geolocation codes
  • Zip codes & mail delivery
  • Political jurisdictions/elected officials
  • Census statistics
  • California sales tax (if applicable)

 


Interested in learning more about the district matching and location lookup service entrusted by organizations including FedEx, Coca-Cola Bottling Company, the Smithsonian and the National Multifamily Housing Council? Discover better accuracy and complete data privacy protection today!

July 22, 2016

How to Find the Municipality by Address

A municipality is a city or town that has corporate status and its own local government. Most people think they can find the municipality of a location by merely looking at the address. That’s not always true.

Mailing city vs. a municipality

Normally, the city we see in a standard address is a mailing city, the city in which the postal office delivering to the address is located. Sometimes, this mailing city is the same as the physical city that the address belongs to.

But that’s not always the case.

When the municipality differs from the mailing city

If an address is located within an incorporated city, the incorporate city is its municipality. However, if the address is not part of the incorporated city, that means this address does not have a municipality.

Let’s find the municipality for the following 2 examples:

  • Address 1: 620 Pole Line Road, Davis, CA 95618
  • Address 2: 1 SHIELDS AVE, Davis, CA 95616

Here is the map that shows the location of these 2 addresses.

The city for the above 2 addresses is Davis. The area highlighted in yellow is the un-incorporated area. The area highlighted in light gray is the incorporated area.

You can see the address “1 Shields Ave” falls in that yellow box. That means this address is not part of the incorporated city of Davis.

In other words, Davis is just its mailing city. It does not have a municipality. It’s physical address should be “1 Shields Ave, Yolo County, CA 95616”.

On the other hand, the address “620 Pole Line Road, Davis, CA 95618” is in the light gray box. It’s in the incorporated area, and its municipality is Davis.

How can you find the municipality by address?

Municipality is a very important determining factor for programs that involve local jurisdictions such as PACE funding programs and California sales and use tax.

The only way to find the municipality for an address is to use a geolocation service. It maps the address and finds its relationship with the municipality database to determine if it’s in an incorporated city. You can lookup municipality for any address in the US using the live demo on USgeocoder.com. Just enter the address and zip code, press the “Free Lookup” button and you will find the municipality for the input address.


Interested in learning more about the district matching and location lookup service entrusted by organizations including FedEx, Coca-Cola Bottling Company, the Smithsonian and the National Multifamily Housing Council? Discover better accuracy and complete data privacy protection today!