SACRAMENTO – Betty T. Yee, chairwoman of the Board of Equalization (BOE), has announced that taxable sales in California decreased 2.7 percent in the third quarter of 2008, reflecting impacts of the national recession, which began in December 2007.

California’s taxable sales totaled $136 billion in the third quarter of 2008, down $3.8 billion from the third quarter of 2007.

This was the fifth straight quarter of declines in taxable sales, lasting longer than either of the recessions in 1991 or 2001.

Income growth continued to be much stronger than taxable sales, a trend in evidence since early 2007.

In the nine-county San Francisco Bay Area, taxable sales decreased 2.3 percent from the same quarter the previous year, a performance only slightly better than the 2.7 percent decline for California as a whole.

In Oakland, taxable sales declined 16.9 percent, which is just 3.4 percent of the total taxable sales in the First Equalization District.

In San Francisco, taxable sales rose by 5.3 percent in the third quarter of 2008, which represents 12.8 percent of the total taxable sales in the First Equalization District.

In San Jose, taxable sales declined by 0.9 percent, which is 10.6 percent of the First District’s total.

In constant dollar terms, taxable sales decreased by 7.5 percent over the same quarter a year ago. The California Taxable Sales Deflator measured an inflation rate of 5.1 percent for the third quarter of 2008. By comparison, the California CPI rose 4.6 percent. Record-high gas prices were largely responsible for the increase in the deflator.

The decline in the first three quarters constant-dollar taxable sales of 2008 have not been as steep since 1991. Constant-dollar taxable sales have decreased since the third quarter of 2007, which has not happened since 1993.

While taxable sales declined 2.7 percent in the third quarter, income rose 3.0 percent. This is consistent with typical growth patterns during periods of economic weakness. Historical data show that quarterly taxable sales rose much less rapidly than incomes in the early 1980s, the early 1990s and early in this decade.

Taxable Sales in California is a quarterly report on retail sales activity in California, as measured by transactions subject to sales and use tax.  It includes data about statewide taxable sales by type of business, as well as data about taxable sales in all California cities and counties from the first quarter of 2000 through the third quarter of 2008 and can be viewed on the BOE Web site at: www.boe.ca.gov/news/tsalescont.htm .

View all TAXABLE SALEs in California for the third quarter of 2008 here: www.boe.ca.gov/news/tsalescont08.htm .