Kings to Keep Arena Construction Tax Revenue in City
A three-way deal between the Kings, the City of Sacramento and Turner Construction will move an estimated $1 million in sales and use taxes directly into the city, instead of state and county-wide tax pools.
“Everything we do, the city and mayor and other folks are working on is all about how do we make this project benefit the whole,” Kings Vice President of Strategic Initiatives Kunal Merchant said.
“Since most of the money would be coming around the cities, it shouldn’t be concentrated on just Sacramento, that doesn’t seem fair,” West Sacramento resident Obed Odoemelam said.
The Kings say the the move is possible because of a program approved by the State Legislature in 1999, which allows contractors to self-accrue their taxable transactions as long as they report them directly to the state Board of Equalization.
“Without getting too technical, it’s all about the point of sale, and the point is – the arena is in the city. So, all the materials we purchase and all of that is going to be booked as revenue to the city,” Merchant told FOX40.
Some perceive the victims in this as other communities where that tax money might go instead. Merchant argues that although Sacramento will solely benefit from this program, the arena project as a whole will still have regional benefits.
“Our fan base is regional, the businesses that get contracts are regional, the workers are going to be regional,” Merchant said. “In so many different ways, this is going to be a regional win for everybody.”
Construction of the new arena is slated to begin this summer.