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Why is Alameda’s Sales Tax So High?

City sales tax comprises just .5% of the 10.75% Alamedans pay

If you have recently made a large purchase, perhaps a new laptop or car, you can’t help but notice that you are paying 10.75% in sales tax on top of the sticker price. For a laptop that cost $1,000, that is an extra $107.50 and for a car that cost $40,000, that is an extra $4,300. Sales tax is added onto almost all purchases. $2.15 for a $20 shirt, 54 cents for a $5 drink—that 10.75% tax adds up over time.

Alameda Post - a cashier holds out a card reader, and a customer taps their card

Alameda, along with Hayward and Albany, has the highest sales tax in California and one of the highest sales tax in the country (Gould, Arkansas has a tax rate of 11.5%). Our high sales tax is vexing, considering that residents of Alaska, Delaware, Montana, New Hampshire and Oregon, do not have to pay any sales tax at all. And it’s especially jarring when you consider the fact that just across the Bay Bridge, San Francisco’s sales tax is only 8.625%. You could buy your $1,000 laptop in San Francisco and pay $21.25 less than if you had bought the exact same item in Alameda.

State sales tax: 7.25%

How did Alameda end up with such a high sales tax? Part of the answer is that California has the highest sales tax in the country at 7.25%. Six percent of that money goes to the state government and the remaining 1.25% funds local operations such as transportation (.25%) and local city and county operations (1%).



See the complete breakdown at the California Department of Tax and Fee Administration website.

Alameda County sales tax: 3%

On top of the state-imposed sales tax, counties also are allowed to levy their own sales tax to collect revenue from purchases. Alameda County has the highest extra sales tax in the state, at 3%. The second highest county sales tax is in Santa Cruz County Unincorporated Area, at 2.25%.

San Francisco County, by comparison, only adds an extra 1.375%. Some counties, like Butte, Ventura, and Kern, do not have any extra sales tax at all, so consumers in those counties would only pay 7.25% in sales tax.

So why does Alameda County impose such a high sales tax? We experienced a 1% bump in 2020 when voters decided to pass two measures that increased our sales tax.

In March 2020, Measure C was proposed to levy a .5% sales tax for 20 years with revenue going to the ​Children’s Health and Child Care for Alameda County Fund. This measure passed but was challenged by the Alameda County Taxpayers Association. The California Supreme Court upheld the measure in April 2024.

In November of 2020, a very slim majority of voters voted yes on Measure W to increase the sales tax by another .5%. This 10 year increase generates revenue for county services that assists unhoused people.

While advocates of Measure C and Measure W argue that funding for vulnerable populations like low income children and those who are unhoused is necessary, others point out that sales tax is regressive. Everyone pays the same amount of sales tax and low income people are disproportionately impacted because they spend a higher portion of their income on sales tax.

City of Alameda sales tax: .5%

We’re now up to 10.25% in sales tax for Alameda County (7.25% + 3%). So why are residents of Oakland paying only 10.25% in sales tax while those of us in Alameda are paying 10.75% on almost everything we buy on the island?

We did it to ourselves. In 2018, we passed Measure F, which levied an indefinite .5% sales tax increase to fund services and infrastructure such as police and fire emergency responses, park maintenance, street repair, and protecting the Bay from pollution. So in addition to the 10.25% sales tax, City of Alameda residents pay an extra .5%.

Exemptions

Not everything we buy here in Alameda is taxed. Exemptions include food, non-carbonated and non-alcoholic drinks at grocery stores, prescription medicine, diapers, women’s hygiene products, and medical cannabis. Baked goods are not taxed. Merchandise sold by Parent Teacher Associations are not taxed. Services such as haircuts, doctor’s visits, manicures, and massages are not taxed.

Taxable items include food from restaurants (dine-in or take-out) and over the counter (OTC) medicines like Advil or Claritin. Carbonated drinks from grocery stores or coffee shops are taxed.

Hot beverages such as coffee and tea are not taxable if sold to-go, which is surprising because some coffee places charge tax on their hot drinks. So the next time you are at Starbucks, make sure you are not paying 10.75% on your latte to go!

References

California Department of Tax and Fee Administration
KQED News
Official Election Site of Alameda County

Jean Chen is a contributing writer for the Alameda Post. Contact her via [email protected]. Her writing is collected at AlamedaPost.com/Jean-Chen.

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