Tax Fix Incoming for Canyon Residents

By MATTHEW MEYER | Reporter

City Councilmember Mike Bonin is targeting a frustrating tax glitch that charges Palisadians Santa Monica’s higher sales tax rate—and diverts the funds to our neighboring city’s coffers.

In a motion introduced to City Council Jan. 26, Bonin calls on the Office of Finance to report back to council in 90 days with information on the extent of the issue citywide and a plan of action for addressing it.

Bonin and other officials reason that if the problem affects Santa Monica Canyon—which is part of the city of Los Angeles despite sharing Santa Monica’s 90402 zip code—it could affect other similarly situated areas, including portions of the Westside near Marina del Rey and Culver City.

Bonin’s motion charges the city’s Office of Finance—which processes some $2.5 billion in revenue from various sources—with identifying these other regions and how widespread the problem is there.

In addition to seeking “options to remedy the issue going forward,” the motion calls for an investigation into a way to “retroactively” gain taxes that were rightfully owed to Los Angeles but distributed elsewhere.

The glitch, which was spotted and vocally protested by Palisadian community leader George Wolfberg, affects those who live in communities that share a name or zip code with a nearby, incorporated city despite actually residing in Los Angeles.

That means they’re entitled to paying 9.5 percent in sales tax on orders that take the customer’s home address into account, including online shopping and even vehicle purchases.

But in Santa Monica Canyon, for example, Palisadians are routinely charged the 10.25 percent tax assessed in the next town over.

Angelenos pay a premium to support services elsewhere, and the city loses out on its tax revenue.

In an earlier report (“Paying Santa Monica’s Taxes” in the Jan. 18 edition) state tax officials confirmed that when mischarged, customers have to contact individual vendors to negotiate the reimbursement of their tax. And it takes further action on the part of the seller to see that the funds are properly re-allocated even after they reimburse a customer.

Wolfberg told the Palisadian-Post he’s hopeful.

“I like it,” he said this week. “All I can ask for at this point. Let’s see what the city’s finance people come up with.”