By CATHY BUSSEWITZ
THE PRESS DEMOCRAT
Shoppers who plan to buy big-ticket items like cars or boats this week may want to wait until Friday, when state sales taxes will fall by 1 percent and vehicle license fees will drop statewide.
But for many consumers, it’s too early to tell whether the extra money in their pockets will make a noticeable difference.
Gov. Jerry Brown tried for months to convince at least a few Republican lawmakers to join Democrats in extending the tax and fee hikes and to put them to a statewide vote, but failed.
As a result, the sales tax rate in Sonoma County will drop from 9 percent to 8 percent in most cities and county areas, and from 9.5 percent to 8.5 percent in Santa Rosa and Rohnert Park.
The statewide sales tax was hiked 1 percent in 2009 to help bridge a ravine of a budget gap. Vehicle license fees also were increased in 2009 from 0.65 percent to 1.15 percent, and those fees will return to 0.65 percent on Friday.
As a result, a driver renewing registration for a 2007 Toyota sedan valued at about $15,000 will pay about $75 less. Currently, the vehicle license fee is about $172, which is part of the total registration expense of about $300.
However, the savings could be offset somewhat if the Legislature votes to raise the registration fee by $12.
It’s unclear what impact the lower sales tax rate could have on the local economy, said Ben Stone, executive director of the Sonoma County Economic Development Board.
“Most people would live with them if they were raised,” Stone said of the tax rates. “This may tip the decision on a car, or a major purchase, if you’re going to spend $5,000 or $10,000 on furniture.”
Some retailers said it would take more than just a 1 percent drop in the sales tax to push people over the edge to make a major purchase.
“If a person has a need, whether it’s a big ticket or small ticket item, they’ll probably move forward on it,” said Paul Pedersen, co-owner of Pedersen’s Furniture in Santa Rosa. “A 1 percent change probably won’t motivate them. If they were going to drop it in half or have a tax holiday, that makes a difference.”
Still, the extra money could make a difference.
“I think in this economy, we notice things a lot more than maybe we did a couple or three years ago, and I think many of us are at the point where we’re more careful,” said Jennifer Yankovich, CEO of the Sonoma Chamber of Commerce. “We watch our pennies at the gas pump.”
At the Department of Motor Vehicles office on Corby Avenue in Santa Rosa, Bill Bhader, a gardener from Rio Nido, got his newly purchased trailer registered on Tuesday instead of waiting for the lower rate. He said he needed the vehicle for work.
The rate change was good news to A.J. Schumaker, 23, a chef who lives in Santa Rosa and commutes to Oakland and is planning to purchase a car soon.
“I’m glad I didn’t get it earlier,” Schumaker said. Even so, he estimated his own savings from the lower registration rate would probably amount to the cost of a day’s commute to work.
The sales tax change will cost the state about $4.5 billion per year, and the lower vehicle license fees will cost about $1.3 billion annually, according H.D. Palmer, spokesman for the state Department of Finance.
“The way the economy is right now, I’m sure that will help a lot of people, but I think the sales tax goes toward important things,” said Nicole Griffith, 22, a Santa Rosa Junior College student who lives in Sonoma. She said public colleges like hers have been cutting classes and raising fees, and stronger sales tax revenue could help the situation.
“I’m sure they need the money now,” Griffith said.