Tax Revenue Sharing Agreements

AB 2854 Reports

Compliance Report for AB 2854

requires cities with sales tax sharing agreements with any type of retailer — online or brick and mortar — that result in a rebated amount of Bradley-Burns Local Sales and Use Tax to report information the following information to the CDTFA and post to their websites by April 30 of each year:

The name of any parties to the agreement.
The total dollar amount of rebated sales and use tax revenues received by each party on or after the execution of the agreement through and including June 30 of the fiscal year immediately preceding the date of the report.
The total dollar amount of rebated sales and use tax revenues received by each party to the agreement during the fiscal year immediately preceding the date of the report.
When the agreement was first executed and when it terminated or will terminate, absent any renewal.
The percentage of a retailer’s sales and use taxes, if any, used to calculate or determine the rebated sales and use tax revenues received by each party to the agreement.
The percentage of a retailer’s sales and use taxes, if any, used to calculate or determine the rebated sales and use tax revenues received by any other person who is not a party to the agreement.

Sales Tax Sharing Agreement Rebates

Apple, Inc. Sales Tax Sharing Agreement

Agreement execution date: December 19, 2013
Agreement termination date: December 19, 2033

Agreement Terms: The agreement is based on an annual baseline of $250,000 in new local tax revenue. For any fiscal year in which new local tax revenue exceeds this amount, the City agrees to provide Apple’s wholly owned subsidiary, Baz Industries, Inc., a fixed payment of $62,500 plus 35% of the amount above the $250,000 baseline. These payments continue for the duration of the agreement term, which includes automatic extensions beyond the initial six-year agreement - an additional six years followed by another eight years - resulting in a maximum total term of 20 years.

Amount of rebated sales and use tax revenues received since the agreement date:

Since Inception through FY 2024/2025: $76,906,587.34
FY 2024/2025: $12,151,087.64

Insight Consulting Services, Inc. Sales Tax Sharing Agreement

Agreement execution date: December 29, 2006
Agreement termination date: June 30, 2026

Agreement Terms: Insight is not entitled to any compensation in a fiscal year unless Revenues exceed $250,000. Once this threshold is met, the City compensates the Consultant based on a tiered structure:

If Revenues exceed $250,000 but are less than $500,000, the Consultant receives $62,500 plus 25% of Revenues between $250,000 and $500,000.
If Revenues exceed $500,000 but are less than $1,000,000, the Consultant receives $125,000 plus 40% of Revenues between $500,000 and $1,000,000.
If Revenues exceed $1,000,000, the Consultant receives $500,000 plus 35% of Revenues above $1,000,000.

The agreement is currently in year six of six possible one-year extensions.

Amount of rebated sales and use tax revenues received since the agreement date:

Since Inception through FY 2024/2025: $8,263,248.20
FY 2024/2025: $623,705.15

*All dollar amounts provided are on a cash basis.