Tax Revenue Sharing Agreements

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Reporting Requirements

Assembly Bill No. 2854 (Stats. 2024, ch. 842) added section 7213 to the Revenue and Taxation Code (RTC). RTC section 7213 and Regulation 1808 require each local agency to report information to CDTFA annually, on or before April 30, for the preceding fiscal year, even if they do not have any tax revenue sharing agreements to report.

RTC section 7213 requires the following information to be reported to CDTFA by a local agency for each tax revenue sharing agreement that resulted in rebated sales and use tax revenue during the immediately preceding fiscal year:

The name or names of parties to the agreement.
The date the agreement was originally executed.
The date the agreement terminated or will terminate, absent any renewal.
The total dollar amount of rebated sales and use tax revenues received by each party to the agreement on or after the date of execution of the agreement through and including June 30 of the fiscal year immediately preceding the date of the report.
The total dollar amount of rebated sales and use tax revenues received by each party to the agreement during the fiscal year immediately preceding the date of the report.
The percentage of a retailer's sales and use taxes, if any, used to calculate or otherwise determine the rebated sales and use tax revenues received by each party to the agreement.
The percentage of a retailer's sales and use taxes, if any, used to calculate or otherwise determine the rebated sales and use tax revenues received by any other person who is not a party to the agreement.

Warland Investments Company Tax Sharing Agreement

Parties to the Agreement: City of Cypress (“City”) and Warland Investments Company (“Developer”)
Date of Agreement: November 13, 2017 (Effective January 1, 2018)
Scheduled Termination Date: July 31, 2029
Dollar amount of rebated sales tax through June 30, 2025: $3,375,000
Dollar amount of rebated sales tax for fiscal year 2024-25: $450,000
Agreement Terms:
- The agreement entitles the Developer to an annual rebate of $450,000, payable in twelve monthly installments of $37,500, if its qualifying tenant is generating $800,000 in Gross Sales Tax Revenue to the City per year. If the qualifying tenant generates between $700,000 and $799,999 in Gross Sales Tax Revenue to the City, the monthly payment reduces to $30,000. If the qualifying tenant generates less than $700,000 to the City, the monthly payment is suspended.

Avenu Muniservices LLC

Parties to the Agreement: City of Cypress (“City”) and MuniServices, LLC dba Avenu MuniServices LLC (“Consultant”)
Date of Agreement: March 23, 2020
Scheduled Termination Date: June 30, 2025
Dollar amount of rebated sales tax through June 30, 2025: $179,018.39
Dollar amount of rebated sales tax for fiscal year 2024-25: $2,889.24
Agreement Terms:
- Consultant provides sales tax auditing services to the City for the purpose of detecting and correcting point-of-sale distribution errors. The agreement provides compensation to the Consultant in the amount of 15 percent of each retroactive correction and the first six reporting quarters following completion of the audit and confirmation of corrections by the California Department of Tax and Fee Administration.