Note: This is the second post in a series about sales taxes and how they apply to unincorporated areas like Castro Valley. Click here for the first post.

How far would you travel to save $20 when you purchase your next flat screen TV?

If you’re like me, you’re looking forward to football season. That may mean you’re perusing the advertisements for television sets with better color, higher definition, immersive experiences, etc. While ultra high-definition (4K Ultra HD) sets are just now coming onto the market, broadcast television hasn’t yet caught up with those new capabilities. If you’re looking for a new television now, you might find one for about $1,499.

But where should you buy one to save money? Sometimes, the cheapest location is Costco. So, let’s go with that scenario. [I am using Costco to illustrate differences in tax rates in various locations, not necessarily as an endorsement of Costco.]

The closest Costco store is in San Leandro, and there is a newer one in Hayward. There are also stores in Danville and Livermore. You even have the option of buying the television online and having it delivered to your door, oftentimes with free shipping. Does it matter where you make your purchase? If you want to save money, it may.

The sales tax rates in some of these locations vary due to the voter-approved initiatives in each location. If you purchase an item here in Castro Valley, you pay 9% sales tax, but if you go to San Leandro, you pay 9.25%. Hayward’s and Livermore’s rates are the same as Castro Valley’s rate of 9%, but Danville’s rate is only 8.5%. The lowest sales tax rate in California is only 7.5%, but those rates are usually in less urban areas. (To find the sales tax rate at any address in California, click here.) Still, if you happen to be driving through some of those low tax rate locations such as Roseville, you might save a little bit of cash by buying your flat screen there. The table below shows your potential savings.

Sales Taxes on a $1,499 Flat Screen TV

The table above shows that you can save $26.23 by buying your television in Roseville instead of at the closest Costco store, San Leandro. Of course, you still need to factor in the cost of travelling to Roseville! If you happen to be there anyway, then the incremental cost is $0, but what if you need to factor in the cost of travel?

Given the standard federal mileage reimbursement rate of 56¢ a mile, the savings on your purchase change dramatically. The table below factors in the mileage cost based on a starting point from Castro Valley High School to each Costco location (per Google maps):

Sales Taxes on a $1,499 Flat Screen TV
With Mileage Expense

The table above shows that your least expensive option is to purchase online (assuming that shipping is free). If you wanted to pick up your television today, you would save $9.11 overall by travelling an extra 3.8 miles to Danville instead of buying your TV at the closest store in San Leandro. Even with a sales tax rate of only 7.5%, you would still spend an extra $101.84, including mileage, by shopping in Roseville instead of buying online.

Of course, the larger your purchase, the more you will save by travelling to a lower sales tax rate area. You will need to determine for yourself the option that makes sense for you.

Just remember that your sales tax dollars stay in the city where you made the purchase, except in unincorporated areas like Castro Valley, where those sales tax dollars go to the county and are not necessarily spent in our community.

Other blog entries in this sales tax series will explain various aspects of sales taxes in more detail. Among the topics discussed will be sales tax history, detailed breakdowns of the overall tax rate, revenue amounts, collection and distribution of taxes, disputes among government entities, accounting, etc.