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Decrease in retail sales tax revenue causes concern that Bay Area businesses will be forced to close

Bay Area

WALNUT CREEK, Calif. (KRON) – The ongoing shelter-in-place order is placing a burden not only on local businesses but Bay Area cities.

In part, due to a decrease in retail sales tax revenue. 

There is concern the economic strain will force more businesses to close.

‘To all our customers: Due to COVID-19 we are forced to close our doors. We have been here for 23-years and we are very sad to be closing.’

You will find that message on the front door of what used to be the High Tech Burrito in Walnut Creek. 

Now, it is just an empty store front in this outdoor shopping center

“You’re going to see more and more small businesses closing their doors because they’re not going to be able to weather this storm,” Rachel Michelin said. 

Rachel Michelin is the president of the California Retailers’ Association. 

She talks about how the trickle effect of viable retail businesses shutting down will impact sales tax revenues in local economies.

“Retail is a large part of the California economy. We’re one of the largest employers. One in four jobs is related to retail. We are a huge economic driver for the state of California, especially an economic driver for local government through sales tax revenue,” Michelin said. 

“Taxable sales in Walnut Creek exceeds $2-billion,” Jay Hoyer said. 

The CEO of the Walnut Creek Chamber of Commerce, Jay Hoyer says the city’s annual intake of retail sales tax will undoubtedly be lower this fiscal year due to COVID-19

“The city would ordinarily get over $20 million in retail sales tax, in addition to over a million in transient occupancy tax, the tax people pay when they stay in rooms and those two spigots have been pretty much shut off,” Hoyer said. 

Michelin says the six Bay Area counties choosing not to follow the rest of the state into Stage 2 of reopening the economy will likely lead to more shops closing down here in the Bay Area.

“Definitely the Bay Area is different than the rest of California. I think it is frustrating. I think it is frustrating as a business owner when you’re looking at other businesses around the state of California, other counties that were able to open. There has been some businesses that benefited because they were able to stay open and I think now we are at a point that we should be able to allow, particularly small businesses to be able to open their doors,” Michelin said. 

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