Laws, Regulations and Annotations


Business Taxes Law Guide – Revision 2022

Uniform Local Sales And Use Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 1.5. Uniform Local Sales and Use Taxes
Chapter 1. General Provisions

Section 7203.1

7203.1. Revenue exchange period; rate of tax. (a) Notwithstanding any other provision of law, during the revenue exchange period only, the authority of a county or a city under this part to impose a tax rate as specified in an ordinance adopted pursuant to Sections 7202 and 7203 is suspended, and the tax rate to be applied instead during that period under any ordinance as so adopted is the applicable of the following:

(1) In the case of a county, 1 percent.

(2) In the case of a city, three-quarters of 1 percent or less.

(b) For purposes of this section, "revenue exchange period" means the period on and after July 1, 2004, and before the first day of the first calendar quarter commencing more than 90 days following a notification to the board by the Director of Finance pursuant to subdivision (b) of Section 99006 of the Government Code.

(c) Subdivision (a) is a self-executing provision that operates without regard to any decision or act on the part of any local government. A change in a local general tax rate resulting from either the rate limitations applied by subdivision (a) or the end of the revenue exchange period is not subject to voter approval under either statute or Article XIII C of the California Constitution.

(d) Existing tax exchange or revenue sharing agreements, entered into prior to the operative date of this section, between local agencies or between local agencies and nonlocal agencies shall be deemed to be temporarily modified to account for the reduction in sales and use tax revenues resulting from this section, with those reduced revenues to be replaced as may otherwise be provided by law.

History—Added by Stats. 2003, Ch. 13X (AB 7X), in effect August 2, 2003, but operative July 1, 2004. Stats. 2003, Ch. 2 (AB X5 9), in effect December 12, 2003, but operative July 1, 2004, substituted "1 percent" for "three-quarters of 1 percent" in paragraph (1) in subdivision (a), substituted "three-quarters" for "one-half" in paragraph (2) in subdivision (a), and added subdivision (d). "Section 7203.1 cease to apply, exempt from" in subdivision (c). Stats. 2004, Ch. 211 (SB 1096), in effect August 5, 2004, substituted "the rate specified … one-quarter" for "the applicable of the following: (1) In the case of a county, 1 percent. (2) In the case of a city, three-quarters" after "so adopted is" in subdivision (a). Stats. 2004, Ch. 610 (AB 2115), in effect September 20, 2004, substituted "applicable of … or less" for "rate specified in … 1 percent" after "so adopted is the" in subdivision (a).