Napa’s Sales Tax Breakdown: Understanding Rates and Community Impact

Understanding how sales tax works is important for every resident, as it impacts City services and infrastructure. The City of Napa is committed to providing clarity on general sales tax principles, regional tax rate comparisons and the distribution of local sales tax revenue to ensure that every resident knows how their taxes benefit the community. This knowledge empowers residents and helps foster a sense of community ownership and transparency in local government.

What is sales tax?

Sales tax is imposed on the retail sale of goods and services. In California, it is collected by the retailer and then passed on to the state. Once collected by the state, a portion of the revenue is allocated back to local districts, including cities and counties, based on predefined formulas and specific local tax rates.

Sales tax applies to the sale of most tangible goods. However, some items are exempt from the tax under State law. Taxable items include items like clothing, electronics and household goods. Groceries, prescription medications and certain medical devices are exempt from sales tax.

Both residents and visitors pay sales tax. A recent City study demonstrated that over 35% of the current sales tax revenue is paid annually by visitors to our City.

How does the Napa sales tax rate compare regionally?

The current sales tax rate in the City of Napa is 7.75%. By comparison, other cities within the region have the following tax rates:

• 7.75%: American Canyon, Calistoga, Yountville
• 8 - 8.5%: Vacaville (8.125%), Fairfield (8.375%), St. Helena (8.25%), Mill Valley (8.25%), Tiburon (8.25%), Novato (8.5%)
• 9 - 9.5%: Corte Madera (9%), Benicia (9.125%), Larkspur (9.25%), San Rafael (9.25%), Vallejo (9.25%), Healdsburg (9.5%)
• 9.75 - 10%: Santa Rosa (9.75%), Petaluma (10%), Sonoma (10%)

The rates presented in this release reflect the latest measures passed during the March 5, 2024, election.

How is Napa's sales tax revenue distributed?

The sales tax rate is composed of a state base rate and additional local taxes. In the City of Napa, the current 7.75% sales tax revenue is distributed as follows:

• State of California: Receives 6% for state-wide programs and services.
• Napa County: Receives 0.25% to support county-level services, a small portion of which is redistributed back to cities within the county.
• Napa Valley Transportation Authority (NVTA): Receives 0.5% to support road maintenance and transportation programs. The City of Napa receives 40% of the 0.5% collected and restricts those dollars to road maintenance and repair projects.
• City of Napa: Receives 1% of the total sales tax collected for local programs and services.

Any additional City sales tax enacted in Napa would be exclusively added to the city's portion of revenue. These funds would be locally controlled and support programs and services within the city, without being distributed to the county or state.

How does Napa use sales tax funds?

The City of Napa uses its share of the sales tax revenue to fund public services, infrastructure improvements and community programs. Sales tax revenue funding is used to provide road maintenance, public safety services and park and recreation programs upgrades. As the third largest revenue source of the City's General Fund, many of the City's public services are funded with local sales tax.

"We are committed to transparency and want our residents to know exactly how a local sales tax works and how the funds are used to benefit our community," said City Manager Steve Potter.

The City of Napa encourages all residents to take an active interest in understanding how sales tax works and its impact on our community. Learn more about sales tax in Napa at www.CityofNapa.org/MeasureG; and find additional information on Napa's budget and revenue sources at www.CityOfNapa.org/951/Budget-101.

Public link

Please use the above public link if you want to share this noodl on another website.