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UC DAVIS: ACCOUNTING & FINANCIAL SERVICES November 20, 2001 DEANS, DIRECTORS, DEPARTMENT CHAIRPERSONS, AND CAMPUS/UCDMC ADMINISTRATIVE OFFICERS Re: New Sales Tax Rate Effective 1/01/2002 The State Board of Equalization has announced that effective January 1, 2002, the California Sales and Use Tax rate will increase by one-quarter percent. The increase in the state rate will result in a combined rate, including county and district taxes, ranging from 7.25 to 8.5 percent. The increase is provided for in Revenue and Taxation Code sections 6051.45 and 6201.45, which states that the State General Fund portion of the sales and use tax rate must increase by one-quarter percent on January 1, 2002, if the California Department of Finance has determined that: --- The General Fund reserve is less than 3 percent of revenues excluding the revenues derived from the one-quarter percent sales and use tax rate, and --- The actual General Fund revenues for the period May 1, 2001, through September 30, 2001, do not equal or exceed the May Revision forecast prior to the November 1, determination. Both of the above conditions have been met, resulting in the upcoming tax change. Departments should plan to accommodate the change in rates by January 1, 2002, keeping in mind that rates could decrease in 2003. The State Board of Equalization has issued more detailed guidance available at http://www.boe.ca.gov/pdf/taxincreasenotice.pdf. If you need additional information, please contact Cyndy Johnson at (530) 757-8936. Sincerely, J. Michael Allred Associate Vice ChancellorAccounting and Financial Services 01-172
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