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www.hdlcompanies.com I [PHONE REDACTED] Q2 2021* Q2 2022* Legend $0 $400,000 $800,000 $1,200,000 $1,600,000 $2,000,000 $2,400,000 SALES TAX BY MAJOR BUSINESS GROUP *Allocation aberrations have been adjusted to reflect sales activity General Consumer Goods County and State Pools Autos and Transportation Restaurants and Hotels Fuel and Service Stations Building and Construction Business and Industry Food and Drugs TOP 25 PRODUCERS CITY OF PALMDALE HIGHLIGHTS Published by HdL Companies in Fall 2022 Antelope Valley Nissan Arco Ashley Furniture Homestore Best Buy Camacho Auto Sales Carmax Chevron Chick Fil A Circle K Diamond Buick GMC Palmdale Diamond Hyundai Palmdale Home Depot Lockheed Martin Lowes Macy’s McDonalds Northrop Grumman Rally Kia Robertsons Palmdale Honda Ross Sams Club w/ Fuel Shell Target Vulcan Materials Walmart Supercenter SALES TAX UPDATE CITY OF PALMDALE 2Q 2022 (APRIL - JUNE) Palmdale’s receipts from April through June were 3.2% below the second sales period in 2021. Excluding reporting aberrations, actual sales were up 0.4%. Sustained higher gas prices due to more commuters on the road and global crude oil reaching an all-time high point, receipts from service stations jumped 10% over a year ago. Increased sales activity and a spike from use tax allocations contributed to the gains from business-industry. However, while general consumer goods saw mixed results, overall retailers couldn’t keep pace with the phenomenal returns from last year. Although the recent addition of new auto dealers helped, diminished receipts likely due to a lack of inventory, hurt auto- transportation returns, further offsetting the growth. The City’s transaction tax, Measure AV, experienced positive results with increased vehicles purchased-registered & strong activity by building suppliers and business-industrial merchants increasing the most. Net of aberrations, taxable sales for all of Los Angeles County grew 11.3% over the comparable time period; the Southern California region was up 11.1%. TOTAL: 6.8% $5,754,987 Measure AV TOTAL: $ 7,054,556 0.4% 11.3% 10.1% COUNTY STATE PALMDALE 2Q2022 ---PAGE BREAK--- TOP NON-CONFIDENTIAL BUSINESS TYPES Q2 '22* Palmdale Business Type Change Change Change County HdL State 36.4% 38.7% 8.8% 792.6 Service Stations 2.9% 7.5% -10.6% 450.6 Building Materials 6.6% 12.0% -3.5% 438.3 New Motor Vehicle Dealers 5.2% 6.3% -8.3% 406.9 Quick-Service Restaurants 17.3% 20.6% 10.7% 341.2 Casual Dining 0.6% -0.1% -15.7% 234.6 Family Apparel 5.3% 5.9% -0.4% 188.9 Grocery Stores 4.2% 3.4% -2.7% 174.0 Specialty Stores -0.8% -3.9% -13.4% 162.9 Electronics/Appliance Stores 1.3% 2.9% -1.9% 160.8 Department Stores *Allocation aberrations have been adjusted to reflect sales activity *In thousands of dollars REVENUE BY BUSINESS GROUP Palmdale This Fiscal Year* 8% Others 18% Pools 12% Restaurants 14% Autos/Trans. 8% Building 29% Cons.Goods 10% Fuel *ADJUSTED FOR ECONOMIC DATA SALES TAX UPDATE CITY OF PALMDALE 2Q 2022 STATEWIDE RESULTS Local one cent sales and use tax for sales occurring April through June was 10% higher than the same quarter one year ago after adjusting for accounting anomalies and back payments from previous quarters. These returns mark the sixth consecutive quarter of double- digit growth since the pandemic periods in 2020, with the July-June 2022 fiscal year up 15%. Commuters returning to offices combined with the Russia-Ukraine conflict continuing to put upward pressure on oil prices and left Californians facing the highest average price per gallon on record resulting in fuel and service station receipts 42% higher than last year. While statewide fuel consumption still trails 2019 levels, local gas prices are expected to remain high until after the summer blend period. Led by consumer’s desire to dine out, a steady rise in tourism and business travel, higher menu prices and great weather, the restaurant sector continues to flourish. Theme parks, entertainment venues and hotels showed the strongest growth with casual dining establishments remaining solid, a trend likely to remain through 2022. The automobile sector experienced modest gains for new car dealers and rental car vendors, however sales of used autos and leasing activity has begun to cool. Brands prioritizing full electric and hybrid models still appear to be the most attractive with consumers, however increased financing rates may cause even their activity to dampen. Tight inventories that contributed to dramatic price increases over the last 18 months are also showing signs of loosening as newer models are released in greater numbers. General consumer goods categories saw steady returns largely propped up by retailers also selling fuel. In comparison with the prior year when consumers were buying merchandise at a record pace, the current returns from apparel and jewelry stores grew moderately with home furnishings showing a slight decrease. With new housing starts accelerating and residential and commercial property values rising, construction contractors remain busy. Lumber prices have softened from prior year highs leaving material suppliers with modest gains, however electrical, plumbing and energy suppliers boosted building sector results. Increased investment in capital equipment remains an important area of growth for county pool allocations, especially as online spending for general consumer goods begins to flatten as consumers return to in-store shopping. Overall, higher priced goods through periods of consistent demand have led to economic inflation. The Federal Reserve Board’s recent actions to curb inflation are anticipated to put downward pressure on sales of autos, building materials and financed general consumer goods, resulting in slower growth by year end and into 2023.