City Will Get All Local Sales Taxes On Arena Construction Costs

The City of Sacramento could get as much as a million dollars as the local share of construction-related sales taxes collected for a new arena downtown.   

Normally, Sacramento County and the City of Sacramento would share that revenue.

But, under a deal announced today, the City will receive every dollar, no matter where materials or services for the project are purchased.

Kunal Merchant is with the development arm of the Sacramento Kings.  He says state law allows contractors to decide where their sales taxes will be  allocated on projects that cost five million dollars or more.

"The City of Sacramento and the taxpayers of the city are the ones that are making the significant investment in themselves and in downtown and in the Kings. And so we feel, I think, a special desire to make sure that we are finding opportunities to really recognize their commitment and this is a great way to do that."

The City will receive 1.75 percent of sales or use taxes collected from construction-related purchases.  The county will not miss out on a quarter-of-a-percent of taxes it would normally receive to be used for transportation costs.

The estimated cost of the arena is $448 million.