Santa Monica Sales Tax Rises To 11.25 Percent: What To Know

SANTA MONICA, CA — Shoppers in Santa Monica began paying a higher sales tax Thursday as a new Los Angeles County levy pushed the city's combined rate to 11.25 percent.

The half-cent increase comes from Measure ER, a countywide sales tax approved by voters in June to raise money for health care, public health and other human services facing reductions in state and federal funding.

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Santa Monica's combined sales tax increased from 10.75 percent to 11.25 percent on Oct. 1, according to the California Department of Tax and Fee Administration's updated city and county sales tax rates. That means a $100 taxable purchase in Santa Monica now carries $11.25 in sales tax, compared with $10.75 before the increase — an additional 50 cents.

The higher rate does not mean every purchase will cost more. California generally exempts food products for human consumption from sales tax, although there are exceptions, including certain prepared and hot foods. Qualifying prescription medicines are also exempt.

Measure ER raises the countywide sales tax by half a percentage point. Individual cities can have higher combined rates because of additional local taxes.

According to CDTFA's rates effective Oct. 1, Santa Monica's new combined rate is 11.25 percent. Several other Los Angeles County cities have rates at or above that level, including Santa Fe Springs at 11.5 percent.

Tax Takes Effect Despite Lawsuit

While shoppers began paying the new tax Thursday, Los Angeles County currently cannot spend the money it generates.

The Libertarian Party of Los Angeles County has filed a lawsuit seeking to invalidate Measure ER. In a statement Wednesday, county officials said the legal challenge does not prevent the tax from being collected but requires the revenue to be held in escrow while the case proceeds. The county said the litigation could take two years or longer to resolve.

"Residents will continue to pay the tax, but no services will be funded with the newly generated revenue until the lawsuit is resolved," the county said.

If the tax is ultimately ruled invalid, the state would administer refunds, according to the county.

Measure ER is intended to raise money for health care, public health and other human services that county officials say are under financial pressure because of reductions in state and federal funding and changes to Medi-Cal eligibility.

The county said it will continue developing plans for how the money would be distributed if the legal challenge is resolved in its favor. The new half-cent tax applies to taxable transactions throughout Los Angeles County, including both incorporated cities and unincorporated communities.

Residents can check current rates throughout California using the California Department of Tax and Fee Administration's sales tax database.