Tax Revenue Sharing Agreements

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Effective January 1, 2025, Assembly Bill 2854 (AB 2854) requires California local agencies, including cities, towns, counties, and special districts, to increase transparency around local tax revenue sharing agreements. These agreements involve any direct or indirect payment, transfer, diversion, or rebate of Bradley Burns local sales tax revenues. Rebated sales and use tax revenues are not limited to the transfer of revenue to the retailer that paid the tax originally, or to a person associated with that retailer, and may include tax revenues paid to a local sales tax consultant, such as payments on a contingency basis.

Why Assembly Bill 2854 Matters

This law strengthens public accountability and transparency around how local sales tax dollars are used to attract businesses and support economic development. It helps ensure that agreements affecting tax revenues are visible, consistent, and publicly accessible, fostering greater trust in local government.

To increase transparency, this new law requires local governments to:

Annually report details of these agreements to the state by April 30 each year.
Post that same information online on the agency’s official website, where it is easy for the public to find.
Disclose key facts like which businesses are involved, how long the agreements last, and how much sales tax is being shared.

If a local government does not have any such agreements, it must still notify the state and is not required to post anything online. The California Department of Tax and Fee Administration (CDTFA) will gather and post the submitted data on its website by June 1 each year and update the information as new reports are submitted.

For more information visit the California Department of Tax and Fee Administration’s website.

City of Simi Valley Tax Revenue Sharing Agreement

The City of Simi Valley currently has one Tax Revenue Sharing Agreement that is based on Bradley-Burns sales tax and is applicable to the reporting requirement. This agreement is for audit services of tax receipts. The service provider charges a 15% fee on any recovered taxes.