INCREASED SALES TAX IN CALIFORNIA WORRY FILIPINO BUSINESS OWNERS AND CONSUMERS

By Henni Espinosa, ABS-CBN North America Bureau

Apr 2, 2013

DALY CITY, Calif. – A recent survey by Thomson Reuters/University of Michigan showed that consumer confidence continued to improve due to more positive signs of expanding employment.  But could this perception be short-lived in California?

Beginning April 1, sales taxes rose in more than 20 cities and counties all over the state and many struggling business owners and shoppers are concerned.

For Lita Gutierrez, the owner of Daly Dollar store, sales tax increases which range from a quarter to a half cent on every dollar of sales, could affect small businesses like hers.

“Shoppers don’t like it.  Every penny counts in a bad economy,” she said.

In the densely Filipino-populated Daly City, sales tax has now reached 9% from the previous 8.5%.

In Los Angeles County, it has increased to the state’s highest at 10%.

Diners at Pampanga Cuisine, a Filipino restaurant, said the sales tax increases are making them think twice about their spending.

“Those who will be greatly affected are those with modest income.  It does add up,”  Lorenzo Sagabaen said.

But restaurant owner Annabel Guevarrais not too worried.  “If what you serve them is good, people will keep coming,” she said.

Consumers buying big ticket items like cars will bear the brunt of sales tax increases.

Jenny Ocampo and her family who plan to buy a $14,000 van are expected to pay close to $1,300 in sales tax.

“We want to save money.  But if it’s a necessity, and we need to buy it, what can we do?” she said.

The sales tax increases are in addition to the quarter percent tax authorized when California voters approved Proposition 30 in November.

Prop 30 is expected to generate an additional $6 billion a year and is intended to help fund schools, community colleges and public safety services in California.

You may contact Henni Espinosa at henni_espinosa@abs-cbn.com for more information.