The city of West Hollywood is reminding local shoppers and businesses that a sales tax rate change will go into effect on Thursday, April 1. The sales tax rate in the city of West Hollywood will increase from 9.5% to 10.25%.

In the November 2020 election, West Hollywood voters approved Measure E, which enacts a 0.75% sales tax to address the COVID-19 revenue shortfall and longer-term impacts to the economy from COVID-19. Businesses are being reminded to update point-of-sale systems accordingly.

Like many cities in California, the city of West Hollywood has been affected by the significant financial impacts of COVID-19. The city is projected to lose as much as $35 million in revenue over the 2020 and 2021 fiscal years, equal to approximately a 20% decline in revenue. The new tax rate could generate approximately $11 million annually. Measure E funds will help prevent cuts to programs and services that are critical to residents and could otherwise help the city recover from the current crisis, such as protecting public health, working with local nonprofits to help community members in need, and helping local businesses survive.

Currently, the maximum sales tax rate allowed in any jurisdiction in Los Angeles County is 10.25%. The sales tax rate in West Hollywood, prior to the implementation of Measure E, had been set at 9.5%. The Measure E sales tax increase ensures that new 0.75% sales tax revenues are kept local. Under the 9.5% sales tax rate, the city was receiving approximately 1% of the 9.5% sales tax rate and the remaining 8.5% was allocated to other taxing entities including the state of California and Los Angeles County.

As the city of West Hollywood continues to respond to a shortfall in revenue due to the COVID-19 pandemic, Measure E will help the city maintain services West Hollywood residents have indicated are important, including: addressing homelessness, expanding health and mental health services, retaining local businesses and jobs, keeping public areas clean and safe, maintaining HIV and AIDS health services, and supporting disaster preparedness.

For information, visit weho.org or contact West Hollywood Revenue Manager Annie Ruiz at (323)848-6499 or at aruiz@weho.org.