For City Council Meeting February 10, 2026
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
Title
Request City Council to Approve a Letter of Opposition to Revenue and Taxation Committee Recommendation Regarding E-Commerce Bradley-Burns Sales and Use Tax Allocation
Body
RECOMMENDATION
Staff recommends that the City Council Approve a Letter of Opposition to Revenue and Taxation Committee Recommendation Regarding E-Commerce Bradley-Burns Sales and Use Tax Allocation
BACKGROUND
At the January 22, 2026 Cal Cities policy committee meeting for Revenue and Taxation, the committee reviewed a recommendation from the City Manager's working group on a policy recommendation regarding the allocation of Bradley-Burns sales and use tax revenues generated from e-commerce transactions. The proposed changes are being framed as a new "equitable split" of the Bradley-Burns sales and use tax generated from e-commerce
Transactions and would result in the following:
? A 50/50 split of the Bradley-Burns sales and use tax revenues generated from ecommerce transactions between warehouse/fulfillment city and destination city.
? A plus or minus of 10% to allow for flexibility.
? Prospective, revenues from existing sales tax sharing agreements not subject to
split.
? Five-year phase-in
? County pool use tax dollars from out-of-state e-commerce transactions
redirected to destination city.
The City Managers Sales Tax Working Group's recommendation to split Bradley-Burns revenues between point-of-sale jurisdictions and destination communities would severely undermine this balance. Introducing a new allocation formula, particularly one with adjustable percentages, would inject uncertainty into many city budgets and weaken the ability to provide basic services to our residents. More importantly, it would penalize communities that assumed the greatest risks to create jobs and economic opportunity.
If these recommendations were to be approved as policy and a c...
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