Sales Tax was a Factor in the Move of Harley Davidson Dealership

The owner of the former Los Angeles Harley Davidson admits that South Gate's high sales tax played a part in his decision to move. However, it was not his main reason for doing so.

The that was located at 13300 Paramount Boulevard since 1989 went ahead and Several reasons led the owner to make this decision, and South Gate’s one percent add on sale tax partly influenced it.

“It was another barrier for people to purchase things,” said Kevin Jones, 34, owner of Los Angeles Harley Davidson dealership. “When people bought merchandise our prices were higher because of the tax.”

Customers purchasing gear from the dealership had to pay more because of the local sales tax. However, the price for a motorcycle was not affected by the municipal sales tax increment, but the belief that it did kept clients away, affirmed Jones.

“Other nearby dealerships would market that if you went to Los Angeles Harley Davidson, you were going to buy a more expensive motorcycle, ” said Jones, who added that this was misleading because the sales tax associated with the purchase is paid according to the municipality that the motorcycle is registered in. “It was totally false, but that did not stop them from doing this.”

South Gate residents voted in favor of an increment to their sales tax in 2008. The increase turned South Gate into one of the two cities that have the highest sales tax in Los Angeles county, along with Pico Rivera, which both stand at 9.75 percent.

“In 2008 we had big structural deficit, and this was the only way we could keep city services, at a reasonable level,” said , Finance Director for the city of South Gate, who cited parks and law enforcement as examples of such municipal services. “We would not be able to provide the level of services that we have without the [increment].”

Nevertheless, the higher sales tax was not the main reason cited by Jones for his move.

“Although the tax plays a role, it is not the most important thing,” said Jones, adding that the number of motorcycles he sold rose by close to 10 percent from 2010 to 211.

Other factors, such as Harley Davidson’s desire to consolidate dealerships in the area, coupled with Jones’s desire to expand his business in a cost efficient way, played a bigger role in determining this move.

“Harley Davidson believes that there are too many dealerships in the area,” said Jones. “We were looking to build a bigger dealership [in South Gate] but it was quicker and cheaper to just purchase one.”

As a result of this, the former Los Angeles Harley Davidson is being to merged with the recently purchased dealership in Orangethorpe Avenue near the Anaheim and Fullerton border. The latter dealership is 50, 000 square foot and therefore twice the size of the South Gate property.

The former dealership in South Gate is still owned by Jones, and he is exploring the possibilities as to what to do with it. Talks are taking place with the city, in relation to potentially redeveloping the dealership into a commercial or mix use property.

“They are interested in redeveloping their holdings on the street,” said Steven Lefever, Director of Community Development for the city of South Gate, . “We have agreed to talk at a later date.”

However, redevelopment is not the only option for Jones, who said he would do so only if it could be done at a reasonable price

 “I would like to redevelop it if it can be done affordably,” said Jones. “But I am also talking to people who are interested in purchasing.” 

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