HomeMy WebLinkAbout11-Mayor's Office
, -
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Mayor Tom Minor Subject: Resolution concerning sales tax
on aircraft fuel
Dept: Mayor's Office
r
aD/t!". . ~ ;
n/f.J/i .. ,.,.
Date: July 17, 1997
Synopsis of Previous Council action:
None
Recommended motion:
Adopt resolution.
,~~
Contact person: Tom Mi no,.
Phone: x51:l:l
Supporting data attached:
Yes
Ward:
FUNDING REQUIREMENTS:
Amount:
Source: (Acct. No.)
(Acct. DescriPtion)
Finance:
Council Notes:
Res 97- 028'"
75-0262
Agenda Item No
t/1/97
II
.
. .
STAFF REPORT
An effort is now underway to ask the State Board of
Equalization to change the way it allocates sales tax on aircraft
fuel. The current allocation methodology should be modified so
that cities receive the sales tax on aircraft fuel sold at their
airports, just as they do on other goods.
The current policy of the Board of Equalization is to send
sales tax on aircraft fuel to the local government where the "place
of principal negotiations" occurred. Since Chevron is the leading
supplier of aircraft fuel, the sales tax on that fuel is remitted
to San Francisco, the location of Chevron's corporate headquarters.
For example, under the current policy the City of San Bernardino
will not necessarily receive its usual proportion of sales tax on
aircraft fuel sold at the San Bernardino International Airport.
That revenue may instead be allocated to San Francisco.
It is estimated that $30 million annually is lost to cities by
this policy. Many have argued that since city services are
impacted by airport operations, cities should also receive the
benefit of revenues generated by the airports. Some of the Board
members have agreed, and the issue will be discussed at a board
meeting in August.
I urge the Council to adopt the resolution requesting that the
Board of Equalization use a more sensible approach to how sales tax
on aircraft fuel is distributed.
JUL-09-1997 12:43
P . 01/01
. .' .STATeCAPITOL
P.O. BOX fl4284D
SACRAMeNTO. CA 9<124900001
~el"'5'1S70
RIOT OFFIce
ST F STREET
ONTARIO. CA 91762
(909) 984-n41
HMi: trecI.aguiar@8IUlIIbIy.CI.gov
!\ssmnh1u
Ohtlifnrnia ~:egislafur:e
FRED AGUIAR
ASSEMBLYMAN. SIXTY-FIRST DISTRICT
Rap,.unting the citi.. of Chino. ChlnO-HlDs. MontcIllr, Ontarto, Pomona, and Rancho Cucamonga
COMMITTEes:
RULES, VicaoCl'lllr
APPROPRIATIONS
HEALTH-'
INSURANce
July 9,1997
The Honorable Tom Minor, Mayor
City of San Bernardino
300 North "0" Street
San Bernardino, CA 92415
DearM~
1 would like to take this opportunity to bring to your attention an issue regarding the allocation of
aircraft fuel sales tax which has a direct impact on your community.
e
The current policy ofthe Board of Equalization is to allocate sales tax on aircraft fuel to the local
jurisdiction where the ''place of principal negotiations" occurred. Thus, the tax on fuel sold by
Chevron at your city's airport is allocated to San Francisco because that city is the corporate
headquarters of Chevron. 1 believe this policy is seriously flawed and lacks basic common sense.
A much better approach would be to allocate sales tax on aircraft fuel at the location of the
airport. Why should San Francisco benefit when the citizens of San Bernardino are the ones
affected by the airport? 1 have made a request of Board of Equalization Member Dean Andal and
Member Ernest Dronenburg asking that this issue be discussed at future Board of Equalization
meeting. Both have agreed to place this issue on the Board's August agenda.
1 hope you share the determination to change the current system and will join me in my effort to
correct this obviously flawed policy. 1 urge you to have your City Council adopt a resolution to
the Board ofEquaJization asking them to change their current policy and adopt one that
recognizes the place of sale is at the wingtip, not corporate headquarters.
ThaJlk you in advance for your support and 1 look forward to hearing from you soon.
Sincerely,
~
e FRED AGUIAR
TOTAL P.01