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AB 1768

Transactions and use taxes: Counties of Contra Costa and Los Angeles.

2025-2026 Regular Session Introduced by Isaac Bryan and 1 co-sponsor

Los Angeles may impose up to 0.5% and Contra Costa up to 0.625% countywide TUTs, approved by voters, temporary through 2031, not counting toward the 2% cap.

From committee: Amend, and do pass as amended. (Ayes 6. Noes 2.) (April 29).
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Bill Summary · AB 1768

Summary of AB 1768 (2025-2026) — Transactions and Use Taxes: Counties of Contra Costa and Los Angeles

This bill would authorize two California counties, Los Angeles and Contra Costa, to enact local transactions and use taxes (TUT) subject to voter approval and specific deadlines, potentially exceeding the general state cap on combined local taxes. The measure is framed as a temporary, special statute addressing fiscal pressures in these counties.

1) Purpose and Intent

  • Facilitate targeted funding for countywide programs in Los Angeles County and Contra Costa County by authorizing new TUTs at higher rates than typically permitted under existing law.
  • Provide a mechanism to address local fiscal challenges linked to federal funding cuts.
  • Create explicit temporary authorization, with sunset provisions, to December 31, 2031.

2) Key Provisions and Changes

A. Los Angeles County (Chapter 3.85, Section 7294.7)

  • Los Angeles County may impose a countywide TUT for general or specific purposes at a rate of up to 0.5%.
  • This rate can exceed the typical combined rate limit described in Section 7251.1, but only if:
    • An ordinance proposing the tax is adopted by the county board of supervisors and submitted to voters for approval under applicable voting requirements.
    • The ordinance is approved by voters in accordance with Article XIII C of the California Constitution.
    • The TUT conforms to the Transactions and Use Tax Law, with the exception of Section 7251.1.
  • The tax rate is not counted toward the combined rate limit for purposes of Section 7251.1.
  • If no approved ordinance is in place by December 31, 2031, this chapter is repealed.

B. Contra Costa County (Chapter 3.18, Section 7287.22)

  • Contra Costa County may impose a countywide TUT for general or specific purposes at a rate up to 0.625%.
  • Conditions mirror those for Los Angeles:
    • Board of Supervisors adopts an ordinance and submits it to voters for approval under applicable requirements.
    • Voter approval must comply with the California Constitution.
    • The tax conforms to the TUT Law except for Section 7251.1.
  • The imposed rate is not considered in the combined rate limit of Section 7251.1.
  • If no approved ordinance by December 31, 2031, this chapter would be repealed.

C. Sunset and Legislative Findings

  • Each county’s authority to impose the tax is limited to until December 31, 2031.
  • The Legislature finds a need for a special statute given unique fiscal pressures in Contra Costa and Los Angeles counties due to federal funding cuts.

3) Who Would Be Affected

  • Primary: Residents and businesses in Los Angeles County and Contra Costa County, as they would be subject to new local TUTs (if approved by voters).
  • Local Governments: County governments would collect revenue under the new TUTs to fund countywide programs.
  • State Revenue System: The new taxes are carved out of the standard cap on local taxes (they are not counted toward the 2% cap in Section 7251.1, and are exempt from some limitations).

4) Procedural and Timeline Aspects

  • Approval Process: Requires a county ordinance adopted by the board of supervisors, followed by voter approval under the applicable constitutional voting requirements.
  • Compliance: Tax must conform to the broader Transactions and Use Tax Law (Part 1.6), with the exception of the cap in Section 7251.1.
  • Sunset: If an approved ordinance is not in place by December 31, 2031, the respective chapter would be repealed.
  • Legislative History: Introduced February 9, 2026; amended and re-referred in April 2026; amended and placed on a modified timeline for consideration.

5) Fiscal and Policy Considerations

  • Potentially higher local tax capacity in the two counties, enabling funding for countywide programs without being constrained by the 2% combined-rate limit.
  • The temporary nature (through 2031) suggests a targeted, time-limited funding strategy; the repeal if not approved by the deadline serves as a built-in sunset.
  • Requires voter consent, ensuring local democratic accountability for any tax increase.

Note: This summary reflects the bill text and its stated provisions as of the latest available version.

Compiled from official sources — confirm details with the bill’s official record.

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