Sales tax hike met with fury, shrugs
Southern California’s recession-battered shoppers mostly seemed to shrug in resignation.
But Day One of forking over higher state sales taxes on everything from toothpicks to pickup trucks left many venting about the latest economic insult and plotting ways to punch back -- or dodge it.
Emerging from the Lakewood Home Depot with cans of spray paint, Richard Dearth said the tax hike of 1 penny per dollar of sales -- bringing Los Angeles County’s rate to 9.25%, one of the highest in the nation -- was the last straw. He and his son, who own and maintain rental units, have decided to join a tax revolt organized by talk radio hosts.
“It’s not a question of whether I can afford it,” said Dearth, 72. “I paid it today. I didn’t notice it.”
But he is steamed that state politicians didn’t ask the public for permission, even though they don’t have to. “It seems with the lobbying going on in Sacramento, they can put together anything they want,” he said.
The tax boost, approved by the Legislature and governor, is part of a package of higher government levies, spending cuts and borrowing proposals intended to close a gaping state budget hole. As of Wednesday, the state sales tax rose from 7.25% to 8.25%. But with added local taxes, the rate varies from 8.25% in many Ventura county cities to 9.25% in Los Angeles. California’s highest combined rate is 10.25% in Pico Rivera and South Gate.
At a Lynwood auto parts store, customer Juan Diosdado said the state is making a mistake.
“If you’re going to increase my taxes, I’m going to think a lot more before I spend,” said Diosdado, 34, who was buying rear lights for a recently purchased truck. “How are we going to fix the economy if we don’t spend?”
The tax hike was a particularly tender topic for plumbing contractor John Handy, 54, the lone customer at a Costa Mesa Honda dealership. He had just come from the long waits and bureaucratic maze of the Department of Motor Vehicles.
“If the state of California was a private enterprise, all these [DMV] people would be looking for jobs,” he said. “And they’re raising our taxes?”
Outside an Office Depot in downtown L.A., Maria Sepulveda tossed a ream of paper into the passenger seat of her truck and fumed about the tax increase -- along with another half-cent county sales tax hike for transit that will hit in July.
“With everything that’s going on, with the situation we’re in, they now want to make things more expensive?” she asked.
Sepulveda, 55, said rent and groceries eat up most of the $700 a month she makes as a housekeeper. Now, she’ll have to stretch her dollars even more. “It’s tough and it’s ugly,” she said.
In a craft store in the downtown flower district, Angelia Harper said lawmakers should have considered the rising food, transportation and housing costs before demanding that taxpayers pay more.
“How do they expect me to stay afloat?” asked Harper, 48, a homeless advocacy worker who lives in skid row housing and cares for her 10-year-old disabled daughter. “The more you take away from us, the less we’re going to spend. I’m pinching pennies as it is.”
Some angled to sidestep the higher taxes.
Mike Crivello and Jackie Wight trekked from San Diego to Culver City on Wednesday morning to pick up their new silver Toyota 4Runner. The couple figures they saved $1,000 in taxes, as well as soon-to-rise license fees, by closing the deal on the phone Tuesday night, hours before the sales tax increase took effect.
Crivello, 44, a physics professor, and Wight, 42, a high school French teacher, had searched online for several days. When they found the SUV they wanted at Miller Toyota, they jumped.
In the Fairfax district, Dani Kelly, who buys products for TV commercials, said she’ll put off a personal TV purchase until she takes a trip to slightly lower-taxed Arizona. “Anywhere but California,” she said.
Legally, California consumers and businesses have been obligated since 1935 to pay a use tax -- equal to the sales tax -- on out-of-state purchases. But compliance has been largely voluntary, particularly for individuals, and only a tiny share of what is owed is collected each year, said Anita Gore, spokeswoman for the state Board of Equalization.
In Long Beach, engineer Ramon Udna said he’s taking his business elsewhere, via the Internet. “I’m definitely going to be looking at other options,” he said after checking prices for camping gear at Sam’s Club.
Others said that public services are being squeezed, there’s little they can do about the tax hike and, really, it’s not worth getting aggravated.
“It doesn’t matter,” said Augie Sibal, a casino banker who was loading groceries in a van at the Long Beach Towne Center. “It’s only a small portion. They have to find ways.”
Up the road at a Norwalk Target store, Leonor Stewart had just paid the higher tax on a $140 digital camera. “I don’t think we have any choice,” said the grocery manager. “I wouldn’t have liked it to go up. But what can we do?”
Laura Williams, a Norwalk teacher, said she had cut expenses and that the tax increase poses an added burden. But she said she feels lucky to have a job when school districts are laying off employees.
“It’s something we have to do to close the state deficit,” she said. “That’s the kind of attitude you have to have with these things.”
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esmeralda.bermudez @latimes.com
joanna.lin@latimes.com
Times staff writers Mike Anton and Ruben Vives contributed to this report.
