Sales Tax


How does the the ½-cent sales tax benefit low income transit riders?

Let’s consider the half-cent sales tax, in the context the cost of driving a car. Increased investment in public transit will provide a transportation option for many low and moderate income families that current have very limited alternatives to the expensive cost of fuel and vehicle maintenance.

Table One: Cost of Public Transit vs. Personal Automobile

Household Income (Range) Annual cost of Public Transit* Annual Transit Cost as a % Of Income Annual Auto Maintenance Costs (Including Fuel)**   Annual Auto Maintenance Cost as a % Of Income
$0- $14,999 946.46 9.5% 4,428.64 44%
$15,000- $26,999 986.10 4.7% 5,662.38 27%
$27,000- $43,999 1,016.10 2.9% 6,886.80 20%
$44,000- $72,999 1,051.60 1.9% 7,584.04 14%
$73,000- $143,999 1,090.67 1.1% 8,242.52 8%
*Includes cost of 1/2 cents sales tax; assumes no public subsidy to offset transit expense.
**Total annual maintenance costs are based on 2008 IRS rate if 50.5 cents per mile.

For low and moderate income families, using public transit is much less expensive as a percentage of their income than using a car. More importantly, this table also shows that low and moderate income families benefit to a much greater extent from having public transit options.

For the transit sales tax under consideration, food, medicine, utilities and housing are not taxed.