Santa Monica shoppers are paying an 11.25% sales tax after L.A. County's Measure ER took effect Thursday, Oct. 1.

The half-cent increase, known as the Essential Services Restoration Act, pushed the countywide baseline rate from 9.75% to 10.25%, according to KTLA.

In Santa Monica, where local taxes already stacked on top of the county rate, the combined rate now sits at 11.25%, confirmed by the California Department of Tax and Fee Administration. Only Lancaster and Palmdale are higher in L.A. County, at 11.75%.

The tax applies to most retail purchases but not groceries, prescription medications or medical equipment.

County voters narrowly approved Measure ER on June 2, with 50.64% in favor and 49.36% opposed, a margin of about 25,770 votes out of roughly 2 million cast, according to Ballotpedia. Supervisors Holly Mitchell and Hilda Solis introduced the measure to offset federal funding cuts that the county estimates will total about $2.5 billion over three years, CalMatters reported in June 2026.

The L.A. County Board of Supervisors voted 4-1 to place it on the ballot. Supervisor Kathryn Barger cast the lone no vote, NBC Los Angeles reported.

None of the new revenue can be spent yet.

The Libertarian Party of Los Angeles County and Shawn Osborne filed a lawsuit Aug. 31 challenging the constitutionality of Assembly Bill 1768 (AB 1768), the state law that allowed L.A. County to exceed the normal sales tax cap. State law requires all Measure ER revenue to sit in an escrow account while the case is pending, according to an L.A. County news release.

The county said the litigation could take two years or longer to resolve. Shoppers pay the higher rate, and the money sits frozen.

Jim Mangia, president and CEO of St. John's Community Health and a leader with the Health Justice United coalition, warned of severe consequences if the funding remains blocked. "If Measure ER is not implemented because of this lawsuit, 5,000 health care workers could be laid off by the spring," Mangia told the Los Angeles Sentinel.

Under the county's initial spending plan, 45% of Measure ER revenue would fund healthcare for low-income, uninsured residents through nonprofit clinics. Another 22% would go to LA Health Services, the county's hospital system, which faces more than $700 million in projected federal and state revenue losses by 2028. Because Measure ER is structured as a general tax, there is no legal requirement that the money be spent on healthcare.

Measure ER is the county's second half-cent sales tax increase in less than two years. Voters approved Measure A, a homelessness tax, in 2024. The new tax is set to expire Oct. 1, 2031.

No court date for the lawsuit has been publicly announced. If the measure is ultimately ruled invalid, the state would administer refunds, according to the county.