THOUSAND OAKS : Tax Shift for Auto Leases Moves Ahead

A state tax measure that could mean hundreds of thousands of additional dollars yearly for cities with automobile dealers cleared a key Senate committee and is heading for final approval, state Sen. Cathie Wright said.

If the measure becomes law, it would mean some of the sales tax levied on leased automobiles would remain in the city where the lease is signed.

Currently, cities get 1% of the sales price of every car sold within their boundaries. But when cars are leased, that 1% is evenly divided throughout the county where the lessee lives.

Thousand Oaks officials said that if the law is passed, another $500,000 a year in sales tax money could pour into city coffers as a result of lease agreements being signed at the Thousand Oaks Auto Mall. Simi Valley officials said the law could mean up to $200,000, additional while Oxnard and Ventura officials estimate similar figures.

“Generally, it’s good news from a money, bottom-line standpoint,” Ventura Mayor Tom Buford said.

The state Senate Revenue and Taxation Committee approved the measure on a 6 to 2 vote Wednesday. The Senate Appropriations Committee still needs to approve the measure before it goes to a full Senate vote.

Wright (R-Simi Valley) wrote the bill, which would also need Assembly approval and Gov. Wilson’s signature before it could become law.

“This is a terrific opportunity to replace some of the money cities lost to the state,” said Wright spokesman John Theiss.