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City of Canyon Lake addresses sales tax overcharge

The City of Canyon Lake is taking a proactive approach to educate Canyon Lake businesses and consumers about the city’s sales tax rate after it was reported to the city that some Canyon Lake businesses were mistakenly charging an 8.75% sales tax rather than the city’s actual rate of 7.75%. Canyon Lake’s tax rate is one percent less than the surrounding cities of Menifee, Lake Elsinore, and Wildomar.

The 1% overcharge is not going to the city, nor does the city have jurisdiction over this issue. Sales tax falls under the jurisdiction of the state, specifically the California Department of Tax and Fee Administration (CDTFA).

During Wednesday’s meeting of the Canyon Lake City Council, City Manager Aron Brown reminded both consumers and businesses of the city’s current tax rate. To further address the issue, the city created and distributed an informational flyer to help businesses and consumers understand the correct rate. The flyer will be posted on the city’s website, available at City Hall, and provided to those applying for a city business license.

According to CDTFA, if a business charges more than the correct amount of sales tax, it must either return the excess to the consumer or remit it to the state; businesses are not allowed to keep the excess. If a business refuses to refund a sales tax overcharge, consumers may contact the CDTFA at 1-800-400-7115.

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