A Recent History of Sales Tax in the City of Grass Valley (2013-2023)

Sales tax rates in Grass Valley have continued to climb over the last ten years within the municipality. In November of 2012, Grass Valley voters approved Measure N, a 10-year sales tax increase to fix roads, hire police and firefighters, and update their equipment. It passed with 66.45% of the vote, raising the sales tax rate from 7.625% to 8.125% in April, 2013. At the time, Measure N was not considered to be a sustainable method of funding City Hall’s financial obligations.

Voter-approved Proposition 30 reduced overall California State sales taxes by 0.25% for 2017. This tax cut was offset partially by an increase in taxes from Measure A, a special purpose imposed for all of Nevada County to expand funding the County’s library system, setting the city’s sales tax rate at 8.0% for most of 2017-18. 

Measure E was introduced in 2018 as a new general tax that would repeal the Measure N mandated sales tax increase prior to its 10-years sunset while simultaneously doubling the sales tax rate from 0.5% to 1.0% and make the tax increase permanent. Measure E proved popular with the City of Grass Valley, passing with over 60% of the vote. As of the 3rd Quarter of 2023, the City of Grass Valley sales tax burden was higher than 59% of all California localities (Source:https://www.salestaxhandbook.com/).

Sales Tax Rates in Grass Valley: What is Being Proposed

The City of Grass Valley, California is contemplating placing a measure on the March 2024 ballot that would raise the sales tax rate for businesses, consumers, and residents of Grass Valley to 8.875% from its current rate of 8.5%. The City of Grass Valley is holding a special council meeting on Monday, October 16 at 6:00 p.m. to review and possibly approve a draft expenditure plan for a sales tax within the City of Grass Valley. The official notice indicates that the meeting will be a “Closed Meeting”.

City of Grass Valley: Sales Tax Rate 2013-2023

To place the proposal on the ballot in March, the City of Grass Valley must first declare a fiscal emergency as required by California State Law.

The tax proposal is a general tax, which requires a 50% + 1 margin of votes to pass. The proposed tax increase includes a sunset clause of seven years and a citizen oversight committee. The proposed tax is also a general tax, which means that funds generated from the increase in the sales tax rate will be used for general purposes, as determined by the Grass Valley City Council. 

The City at this time is requesting additional unrestricted tax revenue for fire personnel and land management to combat wildfire and extreme weather conditions, money that the City cannot budget at this time. The current proposal being considered recommends that half of the proposed funds from the tax be spent on vegetation management and half on fire resiliency.

Why Does It Matter?

Sales tax rates have profound consequences. California has the highest statewide sales tax rate, and is rated ninth by the Tax Foundation in combined state and local sales tax rates. An increase in sales tax, as proposed by the City of Grass Valley, would raise the sales tax rate to 8.875%, the City of Grass Valley sales tax burden higher than 70% of all California localities (Source:  https://www.salestaxhandbook.com/).

Other cities with a tax burden similar to that being proposed by the City of Grass Valley include:

• Modesto (8.875%)

• Ceres (8.875%)

• Ukiah (8.875%)

• Fort Bragg (8.875%)

• Salida (8.875%)

• Empire (8.8755)

Sales tax rates in nearby cities outside of Nevada County’s sphere of influence are already lower than Grass Valley and will marginally benefit from purchasers seeking to escape high tax regimes: 

• Auburn (7.25%)

• Yuba City (7.25%)

• Colfax (7.25%)  

• Roseville (7.75%)

• Marysville (8.25%)

• Reno, Nevada (8.265%)

What is exempt from Sales Tax?

Sales of certain food products for human consumption (many groceries), sales to the US Government, sales of prescription medicine and certain medical devices, and sales of items paid for with food stamps are generally exempt from sales tax. Retail sales of tangible items in California, including items such as clothing, furniture, and gasoline and other forms of energy would be subject to the increased tax.

City Council Meeting Details

PUBLIC COMMENT: Members of the public are encouraged to submit public comments via voicemail at (530) 274-4390 and email to public@cityofgrassvalley.com. Comments will be reviewed and distributed before the meeting if received by 5pm. Comments received after that will be addressed during the item and/or at the end of the meeting. 

Council will have the option to modify their action on items based on comments received. Action may be taken on any agenda item. 

The agenda item reads as follows: 

Fire Resiliency and Vegetation Management approving an expenditure plan and Resolution No. 2023-57 of the City Council of the City of Grass Valley declaring a Fiscal Emergency relating to combating wildfires and extreme weather conditions.  

CEQA: Not a Project 

Recommendation: That Council 

• 1) review and approve the draft expenditure plan; 

• 2) declare a fiscal emergency due to the lack of necessary funding for fire personnel and land management required to combat wildfires and extreme weather conditions as stated in Resolution No. 2023-57; and 

• 3) discuss next steps with City Council.